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 b, because
it excludes flood
damage
coverage, which
is unnecessary
policy a, because
it provides
additional flood
damage
coverage, which
is crucial for high-
risk areas
policy a, because
it has a lower
deductible
policy b, because
it is cheaper
annually

Explanation:

Zahra lives in a high - risk flooding area. Policy A includes flood damage coverage, which is very important for her. Although Policy B is cheaper annually and has a higher deductible, the lack of flood coverage makes it less beneficial for her situation. The option that says Policy B excludes flood coverage as unnecessary is wrong because flood is a high - risk for her. The option that says Policy A is better because of lower deductible is not the main reason here as flood coverage is more critical.

Answer:

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