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?
Answer
A
Policy F, because the higher deductible is manageable
B
Policy E, because it has a lower deductible
C
Policy E, because it covers natural disasters, including earthquakes, and includes home appliance insurance
D
Policy F, because it is less expensive annually
Explanation
Policy E is the better fit because it covers natural disasters, which is important in an earthquake-prone area, and it includes insurance for expensive home appliances. It also has a lower deductible than Policy F ($1,000 versus $1,200). Policy F costs less each year, but it covers only theft and fire and excludes appliance insurance.
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