Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Caib 2 > Chapter 1 > Flashcards

Chapter 1 Flashcards

1
Q

Identify three classes of property insured by commercial property insurance policies

A

Building
Stock
Equipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Identify two ways to insure commercial policy

A

Scheduled - only property specifically listed

POED - property of every description

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Tenants improvements

A

Building improvements, alterations and betterment made at the expense of the insured

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Actual cash value

A

The cost to repair or replace lost or damaged property, less the application of depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Replacement value

A

The cost to repair, replace, or rebuild without deduction for depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Three ways property can be valued

A

ACV
Replacement value
Book value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

5 different approaches that can be taken to determine ACV of lost property

A
  • Formula/cost approach - most common, straight line or plateau
  • Market value - direct sales approach, realtor assesses property
  • Income approach - net/capitalization/ACV
  • True value to owner - when insured claims other methods unsuccessful
  • Broad evidence rule - incorporates all above
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Difference between reinsurance and subscription policies

A

Reinsurance - all insurers share in loss and premiums. Policy paid by primary insurer and all claims paid by it.

Subscription - acts as if each insurer has written their own policy. Seperate pay outs, contracts negotiated separately.

Reinsurance is preferred method

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The difference between package and manuscript policies

A

Package policies combine a variety of coverages on one form, most common

Manuscript policies cover specialized exposures for which no standard form exists.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Locked vehicle warranty

A

Doors are locked and windows are securely closed. Fully enclosed metal compartment. Visible forced entry.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Verification of values

A

The insurer or representative has the right to enter the premesis at a reasonable time to inspect property and examine insureds records, books, and property relating to property insured.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Property protection systems

A

Insurer shall notify immediately of any interruption, flaw, defect, suspension of service to

  • sprinkler or other extinguishing system
  • fire detection system
  • intrusion detection system
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Submission

A

A submission is a proposal to underwriter which can include

  • an application
  • additional verbal information
  • additional written information including previous premium, loss history or details of loss, financial statements, or photos
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the purpose of a survey

A
  • identifies loss exposures
  • helps to eliminate coverages the business does not need
  • develops additional information needed by insurer
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Five classes of building construction

A
  • fire resistive
  • non combustive
  • heavy timber
  • ordinary
  • frame
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Fire resistive

A

Has met minimum standards of hours it will survive a carefully controlled test fire.
Generally steel frame, concrete, brick
Two or three hours

17
Q

Non combustible

A

Falls just short of fire resistive. Most structural components of steel, iron, concrete

18
Q

Heavy timber

A

Quite rare, generally older buildings.

19
Q

Common hazards

A
  • heating
  • occupancy
  • protection
  • electrical
  • detachment
20
Q

Adverse selection

A

The applicants for insurance are those most likely to suffer a loss

21
Q

Risk classification

A

Grouping of classifying of risks according to established criteria.

22
Q

Soft market

A

Intense competition between insurers. Unusually low rates.

23
Q

Hard market

A

Little competition, disciplined underwriting, selective business, little to no discounts.

24
Q

Physical hazards

A
  • Protection - private and public
  • External exposures - location, proximity to other buildings
  • Type of building construction
  • housekeeping
  • occupancy - bookstore vs welding shop
  • geography - River bed, fire services
25
Q

Moral hazard

A

Characteristics of applicant

  • financial condition
  • associates
  • moral character
  • indifference to loss
  • poor management
26
Q

External sources of underwriting information

A
  • broker
  • government records
  • financial rating services
  • consumer investigation reports
27
Q

Internal sources of underwriting information

A
  • loss experience data
  • inspection reports
  • field representatives
  • claims information
  • production records
  • guides and manuals
  • other underwriters
28
Q

Accommodation business

A

Underwriter accepts risk as a favor (accommodation) to broker

29
Q

Making an underwriting decision

A
  • to accept submission on basis presented
  • to reject the risk
  • to accept risk with an increased rate
  • to accept risk, maintain rate but increase deductible

Caib 2 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions