Question

When Simone didn't have health insurance, she acted very cautiously because she knew she would have to pay for any medical bills she incurred. Now that she has health insurance, she engages in more risky activities—like skydiving and snowboarding—because she knows that if she gets hurt, her health insurance will cover it.

Answer 1

Answer:

Moral hazard.

Explanation:

Moral hazard is the concept of somebody changing their actions to the detriment of another after a financial transaction, getting health insurance in this case, has taken place. Meaning acting differently than normal in a situation in which one party gets involved in a risky event knowing that it is protected against the risk and the other party will incur the cost, as opposed to taking less risks if they know they are not protected, leading to that person doing what benefits them the most instead of doing what is right.