Answer:
B. The person lives in an area that experiences hurricanes.
Explanation:
Insurance coverage offers protection against losses caused by risk events stated in the policy document. The insurance company provides financial compensation should the insured suffer losses as a result of a risk covered by the insurance. The policy document states the amount of compensation the insured is entitled.
The amount of compensation is determined by many factors, including premiums. Premiums are considered as the cost of insurance. High premiums indicate that a person has a big insurance cover, which will compensate more in the event of a loss. A person living in a place that experiences hurricanes may want to pay high premiums for a flooding cover. Such a person is greatly exposed to flooding will require significant compensation should floods occur.
