Good point, I guess normally the way you account for that is by making sure that both the insurer and the insuree will still face adverse effects if the event being insured against happens. I would be compensated if my house burns down, but I would still suffer enough hardship that I really want to prevent a fire.
Ostensibly, the cops face other consequences from civil suits, like bad publicity or political sanctions. So we might imagine they’re still strongly discouraged from violating rights. But when police departments have also already sunk resources into building up mechanisms for neutralizing those political or media consequences (like PR professionals, advocacy organizations, police unions and backchannels), we’re left with very little to counterbalance the moral hazard.
It’s almost as though the police institution has taken as its starting point that violating our rights is a necessity, and then organized the rest of its operation around making that as smooth as possible.
