Flood being referred to a peril that can be covered by this policy is correct regarding DIC policies in this scenario.
<h3>What is DIC policy?</h3>
This is referred to as Difference in conditions (DIC) insurance and usually covers some perils not included by the standard insurance policies in most companies.
An example of the incidents covered by DIC policies include flood, theft etc which aren't easily predictable unlike the other forms of risks such as illnesses etc.
This is therefore the reason why it was chosen as the most appropriate choice.
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The correct answer would be #3.
