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CPCU 551 Chpt 1 Test

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1.
The affect of the control of property condition in a commercial property policy is best summarized as
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2.
The following statement is true regarding manuscript forms of insurance policies
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3.
The cancellation provisions in the ISO Common Policy Conditions form are nearly always
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4.
One Common Policy Condition in the Commercial Package Policy (CPP) is the examination of books and records. The intent of this policy condition is to
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5.
Other Commercial Property Insurance Property Conditions 1. Valuation (ACV, RC, Selling Price)
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6.
The policy valuation approach that determines the basis for using new property of like kind and quality and adjusts for depreciation to determine the amount to be paid at the time of a loss is called
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7.
A prop owner has a com prop ins policy with a 90% coins clause. The bldg is insd for $1mm. The bldg suffered $500k fire loss. During loss adjustment, determined RC of the bldg is $1.5mm. Total loss payment the prop owner receives, w/out regard to ded, is
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8.
A Commercial Package Policy, whether monoline or multiline, includes which one of the following forms?
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9.
An insured owns a mortgaged building that is damaged by accidental fire and insured under a commercial property policy. According to the Insured's Duties in the Event of Loss, the insured must
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10.
Warehouse of insured is vacant, insd guessed 1 mos, but was vacant for several mos. Insd forgot to notify insr, after 3 mos of vacancy, the bldg sustained $20k loss due to fire. L8r, vandals caused $5k damage Ignoring any ded, how much would insd recover?
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11.
A policy that covers two or more lines of business by combining ISO's Commercial Lines coverage parts is
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12.
Other Commercial Property Insurance Property Conditions
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13.
Risk mgr for group of convenience stores has begun 6 step risk mgmt process. He analyzed risk control techniques, their feasibility, identified a key loss expos as risk of armed robbery between 1AM & 3AM. Per risk mgmt process, which step is next?
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14.
Which one of the following statements is true regarding the other insurance condition of the Commercial Property Policy (CPP) conditions?
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15.
When used to address property loss exposures, risk control measures are designed to
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16.
Other Commercial Property Insurance Property Conditions 2. Coinsurance
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17.
When evaluating risk management techniques, loss reduction involves
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18.
Pete ins his motorcycle rental property for $100k on an ACV basis. The ACV of the property is $150k and his Com Ins Policy (CIP) has a 9% coins clause. A fire caused $50k of damage to the bldg structure. How much will Pete recoup under his ins policy?
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19.
A mfg co has BPP valued @ $1.5mm The risk mgr is considering insing the BPP with 80% coins at a $0.40 rate/$100 of covg. The 100 % rate is $0.35/$100 of covg. if the BPP is insd with an 80 % coins, how much premium will be saved?
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20.
Common Policy Conditions
A.
If all the terms, provisions, and conditions are the same on both policies, each insurer pays its share on a pro rata basis.
B.
Common Policy Conditions form
C.
$17,000 ($20,000 less 15%) for the fire loss; $0 (nil) for the vandalism loss
D.
If the insured does not have control of the property, any act of neglect by others will not affect coverage.
E.
1. Valuation (ACV, RC, Selling Price) 2. Coinsurance 3. Duties in the Event of Loss or Damage 4. Appraisals 5. Loss Payment 6. Recovered Property 7. Vacancy 8. Mortgageholders Condition 9. Loss Payable Provision Endorsement
F.
Sign a sworn proof of loss if requested by the insurer.
G.
Select the appropriate risk management technique
H.
3 approaches: 1.(ACV): RC less depreciation. 2. (RC): the cost to replace the property with new property, determined at the time and place of loss 3. Selling Price: Stock sold but not delivered valued at sales price less discounts and expenses
I.
Actual cash value.
J.
The total loss payment the property owner will receive, without regard to deductible, is $370,370.
K.
Address the links in the chain of events and the unrelated events that converge to cause a loss.
L.
Coins penalizes insds who do not buy coverage equal to 80-100% of the prop's full value. have/should have * % - ded ((Limit of insurance)/(value of covered property x coinsurance percentage)) x amount of covered loss - deductible
M.
Pete will recoup $37,037 under his insurance policy. [$100,000 / ($150,000 X .90)] X $50,000 = $37,037
N.
The savings will be $5,250 − $4,800 = $450.
O.
1. Cancellation 2. Changes 3. Examination of Books and Records 4. Inspections and Surveys 5. Premiums 6. Transfer of Rights and Duties
P.
Superseded by state law.
Q.
Manuscript forms usually offer more favorable terms for insureds than standard forms.
R.
Reducing the overall severity of the losses that occur.
S.
A commercial package policy.
T.
Reserve the right of an insurer to inspect and audit the insured's books and records.
Type the Answer that corresponds to the displayed Question.
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21.
The inspections and surveys condition clarifies that the insurer does not make
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22.
Which one of the following risk control techniques involves providing a range of products and services used by a variety of customers?
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23.
Various building design features can help prevent the spread of a hostile fire. For example, a solid piece of material that is inserted between wall studs to delay the flow of heat or fire through this open space is a
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24.
Risk control measures may take both a human behavior approach and
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25.
The risk mgr of a midsize mftg co would like several coverage enhancements and a seamless approach to ins for their Building and Business PP, Inland Marine and Crime ins. What type of policy format would best suit the risk manager's needs?
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26.
The inspections and surveys condition, a common policy condition attached to the ISO Commercial Package Policy, makes it clear that the insurer has the right to inspect the insured premises and
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27.
Under an unendorsed BPP Coverage Form if the insd bldg in which the loss occurs has been vacant for 60 consecutive days before the loss, the insr will still be obligated to pay for which one of the following causes of loss?
Type the Question that corresponds to the displayed Answer.
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28.
the cost to replace the property with new property, determined at the time and place of loss
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29.
Peril: cause of loss Hazard: condition that increases the frequency and/or severity of loss

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