Beyond Moral Hazard: Insurance as Moral Opportunity

Deborah Stone

in Embracing Risk

Published by University of Chicago Press

Published in print February 2002 | ISBN: 9780226035185
Published online March 2013 | e-ISBN: 9780226035178 | DOI:
Beyond Moral Hazard: Insurance as Moral Opportunity

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This chapter introduces the important new concept of the “moral opportunity” of insurance. This term is coined to identify an expansionary social dynamic that counters the individual-based forces of moral hazard and adverse selection that traditionally concern insurance and economic analysts. The moral opportunity of insurance is a social dynamic that tends to increase what gets perceived as insurable and deserving of collective support. The chapter identifies six distinct mechanisms underlying this expansionary dynamic of insurance. It argues that the dynamic is appropriately thought of as moral opportunity, because it is powered by beliefs that insurance is a way to help others and to be helped. The discussion of the moral opportunity of insurance reveals the influence that insurance institutions and technologies have on how we imagine individual and social responsibility.

Keywords: moral opportunity; insurance; social dynamic; insurance institutions; technologies; social responsibility

Chapter.  11650 words. 

Subjects: Company and Commercial Law

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