What is the primary concern of a Morale Hazard in insurance?

The primary concern of a Morale Hazard in insurance is indeed carelessness due to insurance coverage. Morale hazards arise from an insured's lack of concern or indifference towards potential risks because they are covered by insurance. This can lead individuals to take more risks or exhibit reckless behavior, knowing that their losses will be compensated by their insurance policy.

For example, a person with comprehensive automobile insurance may not take as much care to lock their car or avoid driving in risky conditions, since they perceive that any losses will be reimbursed. This contrasts with other types of hazards, such as intentional damage, which would fall under moral hazards, and negligence, which can be seen as a lack of reasonable care that can lead to loss, but doesn't specifically relate to the attitude influenced by insurance coverage. Natural disasters refer to external events that cause loss, not a change in behavior resulting from having insurance.