moral hazard


Definition of moral hazard

: the possibility of loss to an insurance company arising from the character or circumstances of the insured

Examples of moral hazard in a Sentence

Recent Examples on the Web Anti-poverty policy was reformulated to respond to worries about moral hazard and dependency. Idrees Kahloon, The New Yorker, 16 May 2022 But forcing insurance companies to pay up to 20 times the retail rate for tests creates a sizable moral hazard problem and misallocation of resources that should not be ignored. Cameron Kaplan, WSJ, 3 Feb. 2022 Along with addressing the scope of emergency declarations, moral hazard concerns created and aggravated by large central government must be reviewed and addressed. Clyde Wayne Crews Jr., Forbes, 13 Oct. 2021 Doesn't filling in these gaps breed moral hazard, and are there not a bunch of bad guys in these areas causing all sorts of problems? Patrick Moorhead, Forbes, 21 Dec. 2021 The war itself created the moral hazard Bush now decries. W. James Antle Iii, The Week, 14 July 2021 China’s leaders are also keen to reduce moral hazard, or risky bets made in the belief that another party will foot the bill if things go wrong. Alexander Saeedy, WSJ, 7 Dec. 2021 Some have fret about the moral hazard involved in effectively bailing out failure. Milton Ezrati, Forbes, 15 Nov. 2021 This level of adequacy would substantially remove moral hazard regarding climate risk. Frank Van Gansbeke, Forbes, 4 Nov. 2021 See More

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'moral hazard.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of moral hazard

1881, in the meaning defined above

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Time Traveler for moral hazard

Time Traveler

The first known use of moral hazard was in 1881

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Dictionary Entries Near moral hazard

Morales (Ayma)

moral hazard

moral insanity

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Statistics for moral hazard

Last Updated

24 May 2022

Cite this Entry

“Moral hazard.” Dictionary, Merriam-Webster, Accessed 27 Jun. 2022.

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More Definitions for moral hazard

moral hazard


Legal Definition of moral hazard

1 : the possibility of loss to an insurance company (as by arson) arising from the character or circumstances of the insured deductibles decrease moral hazard
2 : the likelihood of investors to take greater risks because of the knowledge that losses incurred as a result of those risks will be covered by another (as a government)

More from Merriam-Webster on moral hazard Encyclopedia article about moral hazard


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