A homeowner evaluates two home insurance policies. Policy A offers comprehensive coverage at a cost of 5% of the property value, while Policy B offers basic coverage at 3% of the property value. The property value is $300,000 and the area is known for frequent natural disasters. Which policy provides better value considering risk vs. cost?
Answer
A
Policy A, because comprehensive coverage better protects against natural disasters
B
Policy B, because it is cheaper
C
Policy B, if the homeowner values saving money over comprehensive protection
D
Policy A, if the homeowner can afford the higher premium