Question 84

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 is not an example of risk avoidance; instead, it is a form of risk management that acknowledges existing risk rather than eliminating it.

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

This option illustrates a recognition of risk but does not constitute risk avoidance. By choosing to increase his liability limits, the insured is preparing for potential claims rather than avoiding the risk associated with driving. This action implies acceptance of the risk rather than eliminating it.

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

This choice exemplifies risk avoidance as the insured proactively eliminates the risk of potential lawsuits by removing the danger posed by the Bengal tiger. This action directly reduces liability by ensuring that the animal is no longer in a situation that could lead to harm or legal issues.

C) never leaving his house after dark.

This behavior represents risk avoidance, as the individual is taking measures to avoid potential dangers that may arise at night. By staying indoors, the insured minimizes exposure to risks such as crime or accidents.

D) never flying in airplanes.

This option is also an example of risk avoidance, as the insured chooses to eliminate the risk associated with air travel by opting not to fly. This decision directly reduces exposure to potential aviation-related accidents.

Conclusion

The correct option, A, does not represent risk avoidance because it involves managing an existing risk rather than eliminating it. In contrast, options B, C, and D are all clear examples of risk avoidance, as they involve actions taken to prevent exposure to potential dangers. Thus, A stands out as the only choice that does not align with the concept of avoiding risk.