Which of the following is an example of moral hazard?

Moral hazard refers to a situation where one party is more likely to take risks because they do not have to bear the full consequences of their actions. In this context, faking an accident to collect from an insurer exemplifies moral hazard as it involves intentionally creating a loss to benefit financially from insurance. The individual engaging in this behavior knows that the insurer will cover the fraudulent claim, thereby encouraging risky or dishonest behavior because they do not face the direct repercussions of their actions.

This situation highlights a key characteristic of moral hazard: the individual's lack of incentive to act cautiously or responsibly due to the presence of insurance. Therefore, when someone commits insurance fraud, it represents a clear instance of moral hazard, as their actions are a direct result of the protection provided by the insurance policy.

Other options involve different forms of risk and security issues but do not express the essence of moral hazard, where the behavior directly correlates with the improper exploitation of insurance coverage for personal gain.