Final answer:
To protect against the financial losses described in the Wild Card draw, you should obtain an Insurance unit. Insurance functions by pooling risk among many policyholders, allowing individuals to pay premiums for coverage that can financially protect them from significant unforeseen expenses due to accidents or emergencies.
Step-by-step explanation:
To protect yourself from the bad Wild Card scenario mentioned, which involves a family member hitting a pedestrian and incurring financial loss, you would need to obtain a Insurance unit. The purpose of insurance is to safeguard against unforeseen financial hardships resulting from incidents such as car accidents, medical emergencies, or property damage. Let's use an example to illustrate how automobile insurance functions, making this concept clearer.
Imagine we have 100 drivers, and they face various risks of accidents in a year. 60 drivers experience minor issues costing $100 each to fix, 30 drivers have medium accidents with average costs of $1,000 each, and 10 drivers incur significant damages averaging $15,000 per accident. Without being able to predict who will fall into each category at the start of the year, we find that the total cost of damages amounts to $186,000 for the entire group. This is where insurance comes into play - by pooling the risks and sharing the costs across many members, each person can pay a manageable premium rather than face the full financial burden of an accident.
Insurance policies are designed to provide financial protection and peace of mind in situations like the one described in the Wild Card. When you have insurance coverage, the policy pays out to cover costs associated with car accidents, medical expenses, and even damage to your home, according to the terms agreed upon in the policy.