Alabama Insurance Adjuster Practice Exam

Lucy has insurance on an expensive necklace she wears daily. If she leaves it in her car's cupholder, what behavior is exhibited?

1. Negligence

2. Indifference to risk

3. Risk avoidance

4. Calculated risk-taking

The correct answer is: Indifference to risk

The behavior displayed by Lucy when she leaves her expensive necklace in the car's cupholder is characterized as indifference to risk. This indicates a lack of concern for potential loss or damage to the necklace. By leaving the necklace in a publicly accessible area of her car, she is not taking the necessary precautions to protect her valuable item from theft or accidental damage. Indifference to risk suggests an awareness of possible negative outcomes but choosing not to act to mitigate those risks. In Lucy's case, despite the value of the necklace and the risks associated with leaving it in a car, she does not seem to take those risks into account, possibly because she assumes it will be safe or because she undervalues the potential consequences of her actions. In contrast, calculated risk-taking would imply that she has assessed both the potential benefits and the risks involved and has made an informed decision to leave the necklace where it is. Risk avoidance would involve taking measures to eliminate any exposure to the risk entirely. Negligence typically refers to failure to take reasonable care to prevent loss or injury, which may be a consideration in this context but does not capture the essence of Lucy's potential mindset towards her decision.