sally just purchased a beautiful home on a ri...

sally just purchased a beautiful home on a riverbank for what she thought was a very good deal. she later learned that her house was very susceptible to flood damage during the rainy season. which of the following statements best describes the effect the location of sallys new home will have on her homeowners insurance premium? a. financial loss due to flood damage is likely. her insurance premiums will be higher than homes not on the waterfront. b. since floods are likely, the value of the home decreases significantly, lowering the insurance premium at the same time. c. since floods happen so infrequently, they are not considered a real threat to the value of the home. sallys insurance premium will not be affected. d. while extremely annoying, flood damage is usually inexpensive and will not affect the value of the home. sallys insurance premium should not be affected. please select the best answer from the choices provided

Answer

# Brief Explanations: Insurance premiums are based on risk. A home on a river - bank with flood risk has higher potential for financial loss, so premiums will be higher. Option b is incorrect as flood - risk doesn't necessarily lower home value in a way that reduces insurance premiums. Options c and d are incorrect as floods are a real threat and can cause significant damage, affecting insurance premiums. # Answer: A. Financial loss due to flood damage is likely. Her insurance premiums will be higher than homes not on the waterfront.