What is a moral hazard in insurance?

A moral hazard arises when an individual or business takes more risks because they are protected from the consequences, usually due to insurance coverage. For example, a person with full car insurance might drive recklessly, knowing their policy will cover damages, thereby increasing the likelihood of accidents.

How can communities improve resilience to climate-related disasters?

Communities can improve resilience by enhancing infrastructure, adopting climate-adaptive policies, implementing early warning systems, promoting sustainable land use, and educating residents on disaster preparedness and mitigation.

How do insurers manage catastrophic risks?

Insurers manage catastrophic risks by using reinsurance, maintaining large reserves, diversifying their portfolio, and using models to assess potential losses from events like natural disasters.

Is emergency evacuation covered if I am hiking in remote areas?

Yes, but coverage depends on the policy. Some insurers include emergency evacuation from remote areas, while others require additional coverage for extreme sports or adventure travel. Helicopter rescue costs may also vary by provider.

How does the waiting period impact claim eligibility?

Claims filed during the waiting period are usually denied, meaning policyholders must wait until coverage activates to receive benefits for eligible claims.

Does NCB apply to zero depreciation car insurance policies?

Yes, NCB applies to zero depreciation policies, but filing a claim under zero depreciation coverage will affect your NCB.

How do AI-powered systems ensure fairness in underwriting decisions?

AI-powered systems are designed with algorithms that are based on data-driven insights and are continuously tested to avoid biases. Ethical considerations and fairness checks are implemented in the design of the models.

How does the FCA regulate insurance product governance?

The FCA requires insurers to design products that meet customer needs, conduct regular reviews, and ensure fair value for policyholders under its Product Governance rules.