New York State Life Insurance Exam Questions Practice Question
An insured's home is built on a flood plain, therefore the home is susceptible to flood damage. This is an example of
Correct Answer: C
Rationale: The scenario describes a home located in a flood plain, highlighting its vulnerability to flood damage. This situation exemplifies exposure, which refers to the potential for loss or damage due to environmental factors.
Option A, strict liability, pertains to legal responsibility without fault, which is not relevant here. Option B, risk sharing, involves distributing risk among multiple parties, not applicable in this context. Option D, damage, refers to the actual harm caused, rather than the inherent risk present due to the location. Thus, exposure accurately captures the home's susceptibility to flood risks.
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