Which of the following is an example of a morale hazard?

A morale hazard refers to an individual's indifference toward risk due to the understanding that they are covered by insurance. This type of hazard typically arises from the attitude of the insured person who may take less care because they believe they will be compensated for any loss, reflecting a lack of concern for potential outcomes.

In this context, failure to take safety precautions exemplifies a morale hazard. When individuals or organizations neglect to implement safety measures, often due to the belief that insurance will cover any resulting damages or losses, they demonstrate a willingness to accept a higher level of risk. This mindset undermines risk management and can lead to greater losses for the insurer.

In contrast, other options present different types of concerns: filing a false claim represents fraud, unsafe building practices highlight a lack of compliance with safety standards typically driven by negligence rather than moral hazard, and natural disasters are external, uncontrollable events that do not involve the insured’s behavior or attitude towards risk. Understanding morale hazards is essential in assessing risk and setting appropriate premiums within the insurance industry.