Question 26

Recognizing that his driving skills are deteriorating and therefore increasing the liability limits of his auto policy.

Increasing the liability limits of his auto policy in response to deteriorating driving skills does not constitute risk avoidance; rather, it is a method of risk management or risk transfer. This action acknowledges the risk but does not eliminate it.

A) recognizing that his driving skills are deteriorating and therefore increasing the liability limits of his auto policy.

This option illustrates a response to risk rather than avoidance. The insured acknowledges a risk related to his driving skills and chooses to increase coverage, which indicates an acceptance of the risk rather than avoiding it altogether.

B) sensing the chance of a lawsuit and therefore giving his pet Bengal tiger to a local zoo.

This option exemplifies risk avoidance. By giving the Bengal tiger to a zoo, the insured eliminates the potential risk associated with owning a dangerous animal and the liability that could arise from it.

C) never leaving his house after dark.

This choice also describes risk avoidance. By choosing to stay indoors after dark, the insured actively avoids the risks associated with nighttime activities, such as crime or accidents.

D) never flying in airplanes.

This option represents risk avoidance as well. The insured avoids the risks associated with air travel by simply refusing to fly, thus eliminating the exposure to potential dangers involved in aviation.

Conclusion

Option A is the only choice that does not represent risk avoidance, as it involves increasing liability limits rather than eliminating the risk itself. In contrast, options B, C, and D all demonstrate various strategies of avoiding risks by eliminating the activities or situations that could lead to potential harm or liability. Hence, A stands out as the exception in the context of risk avoidance.