C. With respect to each of the loss exposures mentioned above, identify an appropriate personal risk management technique that could be used to treat the exposure.
Chris and Karen should purchase adequate life insurance and disability income insurance to deal with the risk of premature death and total disability. Chris and Karen and the children should be insured under a group or individual major medical policy to deal with the risk of catastrophic medical bills. Loss control could also be used by practicing healthy lifestyle habits.
A homeowners policy would cover the physical damage and theft of household property. Collision and comprehensive auto insurance would cover the possible physical damage or theft of a family car; retention could also be used by having a deductible for collision and comprehensive losses. Chris and Karen should also check with their insurance agent to see if their homeowners policy provides adequate insurance on the business computer and laptop computer. Karen could also use loss control when she is traveling by not leaving the laptop computer unattended.
The legal liability loss exposures can be handled by a homeowners policy, which provides personal liability insurance. Auto legal liability insurance could insure the legal liability arising out of the negligent operation of a family car by family members.