Which statement about moral hazards is FALSE?

The assertion that moral hazards stem from unconscious behavior is not accurate. Moral hazards are primarily associated with deliberate actions or decisions that individuals make, often due to the safety net that insurance provides. When individuals know they have insurance backing them up, they may engage in riskier behavior than they would if they were fully exposed to the potential losses. This conscious decision-making contrasts with the idea that these behaviors are unconscious.

Moral hazards are indeed issues that arise from human actions and choices, as the other statements accurately highlight: they inherently increase risk (as individuals may take on more risk knowing they are insured), they are linked to reckless behaviors resulting from the perceived security of insurance, and they are very much tied to human decisions, reflecting the way individuals may adapt their behavior based on their insurance coverage. Understanding moral hazards is crucial for anyone involved in risk management or insurance to better assess potential losses and outcomes in insured scenarios.