Suppose sally buys a volvo because they are safe and, as a result, drives faster and pays less attention to other cars on the road. this is an example of

Sallys behavior in which she buys a Volvo because they are safe and, as a result, she drives faster and pays less attention to other cars on the road is an example of moral hazard. The term moral hazard describes a situation in which one party gets involved in a risky event knowing that it is protected against the risk. In this case Sally means that it is protected from accident by the fact that Volvo car is considered as safe.