Best travel deals to hawaii for Moral hazard arises when behavioral changes induced by the purchase of an insurance contract increase the likelihood of the insured event. Conversely, it could be argued that the problem of moral hazard would be resolved if these behavioral changes could be prevented by contract agreement between the insurance company and its customer. The prevalence of moral hazard in insurance markets follows then from the fact that it is virtually impossible for the two parties to agree to an enforceable contract that suppresses altogether the hazard of behavioral changes by the insured party. The main consequences of moral hazard problems for the characteristics of insurance contracts are the use of coinsurance and deductibles. Under coinsurance, the insurance company does not provide full coverage for the costs incurred by the customer when the insured event occurs. Continuing with the example used above, the contract may state that only 80 percent of the medical care costs will be reimbursed. The effect of coinsurance is that the benefits of reduced medical bills are now shared between the insurance company and the insured individual. Best travel deals to hawaii 2016.