John's act of intentionally damaging his car to collect an insurance settlement is an example of which hazard?

John's act of intentionally damaging his car to collect an insurance settlement exemplifies a moral hazard. This concept occurs when an individual engages in risky behavior or conducts dishonest actions because they believe they will not bear the full consequences of those actions, typically because they have insurance coverage.

In this scenario, John's deliberate destruction of property with the intention to defraud the insurance company demonstrates a lack of ethical principles and a willingness to exploit the insurance system for personal gain. Moral hazards are related to the behavior and integrity of individuals, as it reflects their willingness to take risks or engage in fraudulent activities when they perceive a safety net provided by insurance.

This concept is distinct from the other types of hazards. For example, a physical hazard would relate to tangible conditions that could lead to a loss or increase risk, while a morale hazard is more about carelessness and an indifferent attitude toward risks as a result of having insurance. John's actions predominantly align with a moral hazard since they involve intentional wrongdoing aimed at manipulating the insurance system.