Study 4 - Underwriting the Risk: Property Flashcards
What is COPE?
Construction
Occupancy
Protection
Exposure
What are the six categories of construction?
Frame Jointed masonry Non-combustible Masonry non-combustible Modified fire resistive Fire resistive
What else may construction include?
Size of the building
Its age
Number of storeys
Information on the heating system
Briefly describe each element of COPE
C - Description of the types of material used for the building and the size of it
O - Use of the property by its occupants
P - Public & private protection, fire stations, sprinklers, extinguishing systems
E - Chance a loss will be suffered as proximity to one or more risks
What are the main considerations of occupancy?
Home - occupied or rented
Business - type of business
What are the two types of protection?
Public and private
What is the difference between public and private protection?
Public is availability of fire departments
Private is the risk itself, sprinklers, fire extinguishers, etc
How does the Fire Underwriters Survey grade communities?
Risk levels, fire suppression, water supplies, emergency communication and fire prevention
What is exposure?
The possibility of loss by an insured peril in a neighbouring building or the general area
What is an important consideration for seasonals?
The proximity of forests
Define subrogation
Legal process by which an insruance company, after the payment of a loss, is assigned the rights of the insured to receive the amount of the loss from those who are legally liable for it
Define hazard
1) a risk or probability that the event insured against might occur
2) a condition that engenders or increases the chances of a loss
Define common hazard
a hazard that is generally found in most occupancies. Heating, lighting and housekeeping are examples of hazards common to most occupancies
Define special hazards
Foreseen hazards/risks common to certain types of businesses that are not covered in an ordinary policy. For example, woodworking plants and paint shops
Why are problems often heightened for commercial risks?
- Commercials businesses are often larger than dwellings
- They often have more than one occupant
- The occupants activities are usually varied and more dangerous
- The exposure commercial businesses face from surrounding buildings tend to be less predictable and more severe
What is the flash point of a liquid?
The minimum temperature at which it will ignite
Define automatic sprinkler
A device to protect property from damage by fire in which water is piped to devices called “sprinkler heads” that melt with heat and release water to extinguish fire
Explain why different sprinkler liquids may be used
Water is appropriate in many situations
For situations where water might further worsen it; ie. a deep-fat fryer, suppression systems for grease fires must be installed
What are the four stages of fire?
(FISH)
1) Incipient - invisible products of combustion produced, no visible smoke or flame
2) Smouldering - uantity of combustion particles increased to point where they are visible as smoke
3) Flame - actual fire now exists, signficant heat is till not present but follows nearly simutaneously
4) Heat - large amounts of heat, flame, smoke and toxic gases are produced, develops very quickly
What is there to consider of the human element for a fire loss?
- Do employees know where the fire alarm pull stations are?
- Do they know how to leave the building quickly and safely?
- Do they know how to call fire department?
- Have they been trained in the use of extinguishers?
Why is there a bigger threat of exposure with a commercial building?
Commercial buildings are often built much closer together than homes
In a single-family dwelling, why is it important to know whether or not the structure is under renovation
or construction?
- The risk of a fire or other insured loss is greater for a dwelling under construction or undergoing renovations than for one that is not
- Construction or renovation work on a dwelling often entails makeshift arrangements for electrical systems or heating
- Workers carry out hazardous processes, such as welding or cutting with torches
- Combustible materials may be used in building or changing property
- All these activities or aspects of construction and renovation work increase the possibility, even the likelihood, of loss
Why is it important for the owner of a rental property to make regular visits to the property? Use the
presence of a grow op as an example.
The more often an owner visits, the more likely the owner is to notice any behaviour of the tenants
- or problems with the building itself
- that could give rise to loss
• It has been a matter of some legal dispute whether the dwelling owner’s insurance should respond to losses by fire or mould if they arise out of an illegal operation, such as a growop
• Some courts have ruled that, in the absence of a specific exclusion of loss arising from grow-ops, such loss may be considered vandalism or malicious mischief and therefore covered under the policy
• As a result, it has become quite common for a restriction to be placed on the policy to
exclude losses pertaining to grow ops
How might you assess a home?
o What is the size of the dwelling?
o What type of construction was used to build the home?
o How is the home heated?
o How old is the home?
o Is there any construction or renovations currently happening at the home?
o Does the home have any concealed spaces?
How would you use COPE for a commercial building?
o Building age or location o Municipal bylaws o Construction o Construction materials o Heat source o Power loss contingency
