Moral hazard is the economic problem that, by removing consequences for a dangerous action, you increase engagement in that action.

In insurance, moral hazard occurs as actors, now insured from dangerous outcomes, have fewer disincentives to avoid that behavior. For example, if you are insured against losses in a car accident, you may drive faster and pay less attention as the costs of an accident are reduced by your insurance and, thereby, increase rather than decrease the chances of an accident.