In insurance theory, moral hazard is the name given to the increased risk of immoral behavior, and thus a negative outcome (“hazard”), because the person who caused the problem doesn’t suffer the full (or any) consequences, or may actually benefit．Such a concern typically arises in the context of a contract (for example, an insurance policy)．
The most well known examples of moral hazard come from insurance．For example:
Fire insurance increases the motivation to commit arson (纵火), especially if someone is operating a failing business and decides that they’d rather have the cash from the insurance proceeds on the buildings than the buildings themselves．(The value of a business often is based on profitability; after arson, the owner can claim the business was profitable．) In a worst case, the building is over-insured or valuable contents are removed but claims are filed that they were destroyed in the fire．
In finance, low level of effort by the agent (employee) is called the “moral hazard problem” according to agency theory．The more autonomy (自主) the agent enjoys and the greater the information the agent possesses, and the greater the specialized knowledge required to perform the task, the greater the chances for the occurrence of moral hazard．
The problem of moral hazards for insurance can’t be eliminated, but can be minimized．For example:
Getting detailed information to evaluate the value of what is being insured, rather than simply taking the word of the person buying the insurance．
Requiring that there be a deductible(扣除额) (an initial up-front sum which the insured must pay out of his or her own pocket in case of a loss), and/or only paying out a percentage of the loss (say, 80 or 90 percent) via a coinsurance clause．
1．What might be the headache for the insurance company after a fire?
A．Not knowing who set the fire．
B．The owner might over-claim the loss．
C．Where to get the insurance fee paid．
D．How to punish those who cheated the company．
2．What might be the best way not to suffer over-loss in paying back insurance according to the above passage?
A．Investigate carefully after a fire．
B．Try to get as much detail information about the insurance．
C．Try to catch hold of the person who committed arson．
D．Request the buyer of insurance to pay more． 
3．The two examples in the above passage are applied to ______．
A．help people to have reasonable insurance
B．present the difficulties the insurance companies have
C．bring up a problem and a solution in insurance business
D．invite people to buy more profitable insurance
4．The above passage is mainly about ______．
A．a new theory in insurance                            B．a moral challenge in business
C．a common business phenomenon          D．moral hazard in insurance

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