Which of the Following Statements About the Additional Coverage for Damage

question 24

Multiple Choice

Which of the following statements about the additional coverage for damage to property of others in Section II of the homeowners policy is true?

• A)The maximum amount of coverage is $25,000 per occurrence.
• B)Payments are made on the basis of the replacement cost of the damaged property.
• C)There is coverage for property damage arising out of a business engaged in on a full-time basis by an insured.
• D)There is coverage for intentional property damage by any insured who is a teenager.

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Definitions:

Overconfidence

The belief that your abilities are better than they really are.

Underestimating

Underestimating refers to the act of evaluating something as less powerful, important, or serious than it actually is, which can lead to miscalculations in finance and planning.

Anchoring And Adjustment

A cognitive heuristic where individuals rely too heavily on an initial piece of information (anchor) when making decisions, adjusting insufficiently from that anchor.

Frame Dependence

The tendency of individuals to make different (and potentially inconsistent) decisions depending on how a question or problem is framed.