Suppose for the Coming Year a Family Has Calculated Its

question 145

Multiple Choice

Suppose for the coming year a family has calculated its expected value for car repairs to be $3,000. The family decides to buy a car insurance policy that would cover such claims. This insurance policy would cost a total of $3,000 for the household. This insurance policy is:

• A) overcharging the family and is not fair.
• B) an example of a fair insurance policy.
• C) undercharging the family.
• D) not appropriate for the family, and they should not buy it.

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Definitions:

Liability

The state of being legally responsible for something, especially in terms of debts or legal obligations.

Strict Product Liability

Refers to a legal doctrine that holds manufacturers, distributors, or sellers liable for distributing a defective product to a consumer.

Requirements

Conditions or capacities needed by a system or product to solve a problem or achieve an objective.

Plaintiff

The party who initiates a lawsuit by filing a complaint with the court, alleging harm or wrongdoing by the defendant and seeking legal relief.