A characteristic of moral hazard is:

Moral hazard refers to a situation where a party is more likely to take risks because they do not have to bear the full consequences of that risk. This often occurs in insurance and financial contexts. The characteristic that best illustrates moral hazard is the tendency to make deliberate false claims. When individuals or entities know they will not fully experience the negative consequences of their actions—either due to insurance coverage or other external protections—they may be more inclined to engage in deceitful or reckless behavior, such as submitting fraudulent claims.

In contrast, other options do not capture the essence of moral hazard. Indifference to losses may indicate a lack of concern for potential negative outcomes but does not necessarily relate to the manipulation of circumstances for personal gain. Uncontrollable external factors do not characterize moral hazard, as moral hazard is specifically about human behavior and decision-making, rather than uncontrollable circumstances. Proactive loss prevention measures reflect responsible behavior aimed at reducing risk exposure, which is the opposite of the opportunistic behavior associated with moral hazard.