What kind of hazard is evidenced by someone disregarding the security of their property due to an over-reliance on insurance?

The correct choice is categorized as a morale hazard, which refers to the potential for increased risk when a person or entity has insurance coverage and becomes careless or less vigilant in protecting their property because they rely on the insurance to cover any potential loss. In this case, the individual disregards the security of their property, demonstrating a lack of concern for safeguarding it, possibly because they believe that any loss will be compensated by their insurance policy.

This behavior can lead to increased risks for both the insured individual and the insurance company since the expectation of reimbursement may diminish the insured's motivation to prevent losses. Morale hazards often arise when insured individuals feel more secure in taking risks or neglecting certain responsibilities since they know that their losses will be covered.

The other types of hazards have different definitions and implications. A moral hazard typically involves unethical behavior or a change in a person's behavior that results from the presence of insurance, while a physical hazard refers to tangible conditions that affect the likelihood of a loss, and a legal hazard relates to potential legal liabilities that can affect insurance risks. Each of these other hazards illustrates different aspects of risk and insurance but does not align with the behavior of neglecting property security due to over-reliance on insurance.