Final answer:
Adequate auto and homeowner's insurance has several financial benefits including limiting liability, protecting net worth, and covering legal expenses in a lawsuit, making 'D) All of the above' the correct answer.
Step-by-step explanation:
Having adequate amounts of auto and homeowner's insurance affects your financial plan in multiple ways. It can help limit your liability to others by providing coverage in case you are responsible for an accident or damage.
Additionally, insurance protects your net worth, ensuring that a significant financial setback, like a lawsuit or damage to your property, does not diminish your wealth. Lastly, while having insurance may not necessarily make you less likely to be sued, it can offer peace of mind by covering legal expenses and potential damages up to the policy's limit, should a lawsuit occur.
The correct answer to the question is D) All of the above. Having adequate insurance limits your liability, protects your net worth, and, while it won't reduce the likelihood of being sued, it can cover legal expenses and damages in the case of a lawsuit.