Question

zahra is reviewing home insurance policies to determine which offers the best value based on her needs.
policy a: annual cost of $1,200, covers fire and theft, $500 deductible, includes flood damage coverage
policy b: annual cost of $1,000, covers fire and theft, $800 deductible, does not include flood damage coverage
zahra lives in an area with a high risk of flooding. which policy should she consider purchasing to maximize her benefits considering her financial situation?
policy a, because
it provides
additional flood
damage coverage,
which is crucial for
high - risk areas
policy b, because
it excludes flood
damage coverage,
which is
unnecessary
policy b, because
it is cheaper
annually
policy a, because
it has a lower
deductible

Explanation:

Zahra lives in a high - risk flooding area, so flood damage coverage is crucial. Policy A includes flood damage coverage, while Policy B does not. Although Policy B is cheaper annually and has a higher deductible, the lack of flood coverage in a high - flood - risk area makes it less beneficial. Policy A's flood coverage is important for her situation.

Answer:

Policy A, because it provides additional flood damage coverage, which is crucial for high - risk areas