Moral Hazard

This commercial, among others by State Farm, to me is relates exactly to the moral hazard problem with insurance.  The guy drives the car onto another car while parking, but don’t worry, sing the jingle and you can get anything you want! While in this commercial they change their respective spouses, in others it ranges from hot tubs to Bob Barker with a new car.

This commercial always got to me because while the commercial is funny, it basically just says the same thing, as long as you have insurance, go ahead wreck your car, there is someone to pay the damages!

And its most unfair to the safe driver, because he is the one who has to pay so much to get insurance, just because the company differentiate between the safe driver and the other less concerned drivers.


(video copyright: Youtube)

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