If an Individual Voluntarily Purchases Insurance on His/her Home to Protect

Multiple Choice

If an individual voluntarily purchases insurance on his/her home to protect against a loss due to fire, the individual:

A) Is convinced a fire will occur
B) Believes the premium for the policy is less than the expected loss from a fire
C) Has calculated the probability of a fire to be high
D) Has underestimated the probability that a fire will occur