Question 58

The insured recognizes that his driving skills are deteriorating and therefore increases the liability limits of his auto policy.

This choice describes a situation where the insured is not avoiding risk but rather managing it by increasing his liability limits in response to a perceived risk related to his driving skills.

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

This option illustrates risk management rather than risk avoidance. By increasing liability limits, the insured acknowledges the risk associated with deteriorating driving skills and takes steps to mitigate potential financial consequences instead of avoiding the risk altogether.

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

This example represents risk avoidance, as the insured eliminates the potential risk of a lawsuit by transferring the ownership of a potentially dangerous pet to a local zoo, thereby avoiding any associated liability.

C) never leaving his house after dark.

This choice is a clear example of risk avoidance. The insured avoids the risks associated with being outside at night, potentially due to fears of crime or accidents, by remaining indoors during those hours.

D) never flying in airplanes.

This option exemplifies risk avoidance as well. By choosing not to fly, the insured avoids the risks associated with air travel, such as accidents or health concerns, thereby eliminating exposure to that particular risk.

Conclusion

The correct answer is A, as it focuses on risk management through increasing liability limits rather than avoiding risk itself. In contrast, options B, C, and D demonstrate clear examples of risk avoidance, where the insured takes actions to eliminate or reduce exposure to potential risks.