Question

lailah is evaluating homeowner insurance options to ensure coverage in her earthquake - prone area. below are the details from two different policies.
policy e: annual cost of $1,500, covers natural disasters, $1,000 deductible, includes home appliance insurance
policy f: annual cost of $1,200, covers only theft and fire, $1,200 deductible, does not include home appliance insurance
if lailah also has expensive appliances, which policy should she choose to protect her assets best?
policy f, because the higher deductible is manageable
policy e, because it has a lower deductible
policy f, because it is less expensive annually
policy e, because it covers natural disasters, including earthquakes, and includes home appliance insurance

Explanation:

Lailah lives in an earthquake - prone area (a natural disaster), and has expensive appliances. Policy E covers natural disasters (including earthquakes) and includes home appliance insurance. Policy F only covers theft and fire and doesn't include appliance insurance. The other options' reasons are flawed: a higher deductible isn't a good reason for choosing F, E's deductible is lower but that's not the main reason here, and F is not less expensive when considering coverage needs. So Policy E is better for her asset protection.

Answer:

Policy E, because it covers natural disasters, including earthquakes, and includes home appliance insurance