morale hazard
Morale hazard is an increase the probable frequency or severity of loss due to an insured peril that arises from an indifferance on the part of the insured to the loss occurring.
Additional Information
Most often this indifference is caused by the mere fact that insurance will cover the loss. Morale hazard, as contrasted with moral hazard, does not reflect on the character or integrity of the insured but on the insured's attitude. For example, an insured that would not intentionally set fire to its vacant building would not be as motivated to protect the building from fire if insurance would exist to cover the loss.
