Behavioral economics represents a relatively new and promising area within the entire economic science. It bases its uniqueness on the fact that it successfully combines knowledge from psychology and economics, thus forming new economic theories more adapted to real individuals, that is, the true way of making economic decisions and behavior, rather than the ideal one. In contrast to standard economic theory, which bases its models on the assumption of unlimited human rationality, due to which individuals are able to make the most correct decision in every situation, behavioral economists tend to attribute certain cognitive limitations to people, which often lead to unfavorable economic decisions. In doing so, people use heuristics as their main tool - shortcuts for simpler reasoning and decision-making. Although practical and useful, heuristics often lead to mistakes, and the attitude of behavioral economists is that such mistakes are made by all of the people, standard and very predictable, and therefore it is necessary to analyze them and, according to the results of the analysis, create economic models that, instead of unlimited rationality, will assume precisely those predictable mistakes. By doing so, the economic theory would have a greater practical value because it would be based on real instead of ideal economic behavior. This is precisely the main contribution of behavioral economics, and numerous studies conducted with the aim of a more comprehensive understanding of the human mind point to the possibility of improving business within the insurance sector such as choosing the most adequate type of insurance suitable for the specific situation of the potential insuree, reducing ex ante and ex post moral hazard, as well as reducing and preventing insurance fraud, all by implementing the findings of behavioral economists.