AU 61 Chapter 1
A property location's probable maximum loss (PML) is
Select one:
A. Calculated excluding the effects of building features that impede the vertical spread
of fire.
B. The underwriter's estimate of the largest loss likely to occur.
C. The amount of insurance carried on the location.
D. The loss expected under normal operating conditions with all fire protection services
working. - answerB. The underwriter's estimate of the largest loss likely to occur.
Often times a risk's causes of loss can be evaluated by the characteristics that can be
examined via the data collected. This automated underwriting decision is referred to as
which one of the following?
Select one:
A. Straight through processing
B. Account evaluation processing
C. Initial application processing
D. Efficient coverage processing - answerA. Straight through processing
Personal property values are easier to determine than real property values. However,
when the values of personal property are difficult to resolve, which one of the following
is almost always required?
Select one:
A. A comparison to similar insureds
B. An inspection by the insurer
C. A report from the insured
D. An outside appraisal - answerD. An outside appraisal
Sarah is a commercial property underwriter. When working with a valuation guidebook
or computer software, she uses several factors to determine a property's value. Which
one of the following is a factor evaluated by underwriters to determine property value?
Select one:
A. Number of emergency exits
B. Past insurance premiums
C. Building occupants
D. Construction materials used - answerD. Construction materials used
An insurance policy's valuation method will determine the value of the insured's property
in the event of a covered loss. Which one of the following valuation methods factors in
depreciation when determining the value of insured property?
Select one:
A. Replacement cost
, B. Selling price valuation method
C. Actual cash value (ACV)
D. Functional valuation method - answerC. Actual cash value (ACV)
Which one of the following statements concerning fire is correct?
Select one:
A. The temperature required for combustion decreases as atmospheric pressure
increases.
B. The difference between fire and other forms of oxidation is that only fire releases
heat.
C. Fire is a chemical reaction of oxygen and heat.
D. The rate of heat release remains constant during a fire. - answerA. The temperature
required for combustion decreases as atmospheric pressure increases.
Which one of the following is the cause of an incendiary fire?
Select one:
A. Arson
B. Nature
C. Fission
D. Friction - answerA. Arson
Underwriters usually consider which one of the following perils to be the most significant
cause of a property loss?
Select one:
A. Windstorm
B. Fire
C. Vandalism
D. Lightning - answerB. Fire
Fire differs from other forms of oxidation in which one of the following ways?
Select one:
A. The speed at which the chemical reaction occurs is different
B. It requires a fuel source.
C. It can sustain itself without oxygen.
D. It releases energy in the form of heat. - answerA. The speed at which the chemical
reaction occurs is different
The fire tetrahedron model illustrates that if any of the four components of fire were
removed, the fire would do which one of the following?
Select one:
A. Spread
B. Create another chemical reaction
C. Extinguish
D. Ignite - answerC. Extinguish
A property location's probable maximum loss (PML) is
Select one:
A. Calculated excluding the effects of building features that impede the vertical spread
of fire.
B. The underwriter's estimate of the largest loss likely to occur.
C. The amount of insurance carried on the location.
D. The loss expected under normal operating conditions with all fire protection services
working. - answerB. The underwriter's estimate of the largest loss likely to occur.
Often times a risk's causes of loss can be evaluated by the characteristics that can be
examined via the data collected. This automated underwriting decision is referred to as
which one of the following?
Select one:
A. Straight through processing
B. Account evaluation processing
C. Initial application processing
D. Efficient coverage processing - answerA. Straight through processing
Personal property values are easier to determine than real property values. However,
when the values of personal property are difficult to resolve, which one of the following
is almost always required?
Select one:
A. A comparison to similar insureds
B. An inspection by the insurer
C. A report from the insured
D. An outside appraisal - answerD. An outside appraisal
Sarah is a commercial property underwriter. When working with a valuation guidebook
or computer software, she uses several factors to determine a property's value. Which
one of the following is a factor evaluated by underwriters to determine property value?
Select one:
A. Number of emergency exits
B. Past insurance premiums
C. Building occupants
D. Construction materials used - answerD. Construction materials used
An insurance policy's valuation method will determine the value of the insured's property
in the event of a covered loss. Which one of the following valuation methods factors in
depreciation when determining the value of insured property?
Select one:
A. Replacement cost
, B. Selling price valuation method
C. Actual cash value (ACV)
D. Functional valuation method - answerC. Actual cash value (ACV)
Which one of the following statements concerning fire is correct?
Select one:
A. The temperature required for combustion decreases as atmospheric pressure
increases.
B. The difference between fire and other forms of oxidation is that only fire releases
heat.
C. Fire is a chemical reaction of oxygen and heat.
D. The rate of heat release remains constant during a fire. - answerA. The temperature
required for combustion decreases as atmospheric pressure increases.
Which one of the following is the cause of an incendiary fire?
Select one:
A. Arson
B. Nature
C. Fission
D. Friction - answerA. Arson
Underwriters usually consider which one of the following perils to be the most significant
cause of a property loss?
Select one:
A. Windstorm
B. Fire
C. Vandalism
D. Lightning - answerB. Fire
Fire differs from other forms of oxidation in which one of the following ways?
Select one:
A. The speed at which the chemical reaction occurs is different
B. It requires a fuel source.
C. It can sustain itself without oxygen.
D. It releases energy in the form of heat. - answerA. The speed at which the chemical
reaction occurs is different
The fire tetrahedron model illustrates that if any of the four components of fire were
removed, the fire would do which one of the following?
Select one:
A. Spread
B. Create another chemical reaction
C. Extinguish
D. Ignite - answerC. Extinguish
