Duplicate coverage, or any extra insurance on top of your existing insurance, is not necessary.TrueFalse

Which of the following policies would be a duplicate coverage for your health insurance policy?Long-term care insuranceAuto insuranceCancer and hospital indemnity insuranceDisability insurance

With a(n) term option, you can continue your existing term insurance coverage for another term.

In the event of an insurance claim, if you are willing to pay a $1,000 deductible instead of $500 deductible you will pay a higher premium each month for your insurance. True False

What principle asserts that the insurance will pay only once, even if the insured holds multiple policies?ContributionSubrogationIndemnityProximate cause

Suppose now June can purchase insurance for the transport of her householde§ects at a price of q 2 (0; 1) per dollar of coverage. That is, if she chooses apolicy that covers a maximum of C in the event of a loss, she pays qC to theinsurance company and they agree to pay her in the event of a loss, the valueof her loss up to the agreed maximum cover of C. So, in particular, if she3takes out a policy with the maximum coverage of L, then she will be fullyinsured in the event of the truck crashing since her state-contingent wealthwill be M qL in the event the truck does not crash and M qL L + L =M qL in the event the truck crashes.(d) (5 points) Illustrate on your diagram from part (a) her state-contingentwealth bundles corresponding to the set of choices going from zero cov-erage (that is, C = 0) to full coverage (that is, C = L). [Hint: eachadditional dollar of coverage reduces Juneís wealth by q dollars in theevent the truck does not crash and increases it by q + 1 in the eventthe truck crashes.]