After Hurricane Katrina there was considerable public outrage that many of the properties were not insured against flooding although they were insured against wind damage. What might explain these different approaches to insurance? A. Predatory insurance policies. B. The risk of flood damage is potentially diversifiable but the risk of wind damage is not. C. The risk of wind damage is potentially diversifiable but the risk of flooding is not. D. Neither the risk of wind damage or the risk of flooding is diversifiable.
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