AU 61 Final Practice test
Underwriters must sometimes underwrite package policies for applicants that have
differing loss exposure levels by line of business. Which one of the following can be
used to ensure that enough premiums are paid to cover the higher hazard risks? -
answer Minimum premium levels for low hazard risks
Policy provisions usually specify a valuation method which states how the insurer will
determine the value of the insured's property in the event of a covered loss. Which one
of the following types of valuation methods reimburses the insured fully for any losses
sustained and eliminates uncertainty in loss adjustments? – answer RC
In considering a worst case scenario for a chemical lab exposure, property underwriter
Thad assumes that the automatic fire sprinklers will not be maintained and fully
functional to actuate when a fire occurs and that firefighters will not respond to the alarm
in a timely manner. While this seems unlikely, Thad wants to make sure all facts of the
loss exposure have been considered. To determine the potential loss severity for the
chemical lab Thad is using the measure of - answerProbable Maximum Loss
Underwriters should examine the financial condition of potential insureds because -
answerThe financial state of a company is also a tangible measure of management
competence and resources available for effective risk control.
It is important for an underwriter to understand how the materials of a building are rated
for their fire resistance and flame spread ability. Flame spread refers to how readily
flames spread - answerHorizontally across the surfaces of a building's materials, such
as from one room to another.
Which one of the following has the greatest effect on how different types of construction
are classified? - answerMaterials for LBC
Underwriter Joe Hess is evaluating a building for insurance coverage. This exposure is
a four-story building of ordinary construction. The building is likely to present Joe with all
of the following problems, EXCEPT: - answerDifficulty in determining susceptibility to
wind damage
Noncombustible interior finishes that are relatively less combustible include all of the
following, EXCEPT: - answerPlastic wall coverings
When evaluating a submission for a building more than 20 years old, some underwriters
request a risk control inspection to verify the condition of the key elements of the
building. Which one of the following is most likely what an underwriter wants to verify,
, even with an older building that has been adequately maintained? - answerThat the roof
shingles and surfaces have been replaced within the last twenty to thirty years
Arthur requested a risk control survey to support his underwriting of a college dormitory.
Upon review of the survey report, he discovered that a number of problems had been
found, evidencing shoddy workmanship. The building had exposed electrical wiring,
stair landings constructed of particle board, and an inoperable sprinkler system. The
concrete block walls were penetrated by cables, without application of firestopping
material to restore the fire-resistance rating of the walls. Arthur declined to quote the
account, due to the building contractor's failure to comply with which one of the
following? - answerPerformance codes
Heating systems should be properly installed and maintained, as they represent a
common ignition source for habitational occupancies. Also, air conditioning ducts that
run throughout a building can quickly spread smoke and fire. Automatic dampers
installed in a habitational occupancy can help provide fire protection with respect to -
answerAC systems
If the city of Newburgh had a public protection class of 5, what is the best public
protection class that could be received by an individual property in Newburgh? -
answer5
Which one of the following major objectives of effective housekeeping is more important
for fire suppression than fire prevention? - answerRemoving obstructions
Active participation in a company's risk control program can be gained by linking it to the
company's - answerJob performance & appraisal system
Which one of the following statements is true regarding the construction of an insured
building and any exposing buildings? - answerWhen the exposing building is taller that
the insured building, the chances of an exposure fire increase.
Which one of the following statements concerning fire is correct? - answerThe
temperature required for combustion decreases as atmospheric pressure increases.
Which one of the following would be considered by an underwriter to increase the
likelihood of fire? - answerA. The insured's inexperienced maintenance staff performs
the annual maintenance work on the heating equipment.
Correct. The insured's inexperienced maintenance staff performs the annual
maintenance work on the heating equipment.
B. The insured uses forced air heating units with insulated ducts.
C. The insured uses wood-burning heating equipment and has it cleaned periodically by
qualified professionals.
D. The insured uses low profile portable heaters in its warehouse operations.
Underwriters must sometimes underwrite package policies for applicants that have
differing loss exposure levels by line of business. Which one of the following can be
used to ensure that enough premiums are paid to cover the higher hazard risks? -
answer Minimum premium levels for low hazard risks
Policy provisions usually specify a valuation method which states how the insurer will
determine the value of the insured's property in the event of a covered loss. Which one
of the following types of valuation methods reimburses the insured fully for any losses
sustained and eliminates uncertainty in loss adjustments? – answer RC
In considering a worst case scenario for a chemical lab exposure, property underwriter
Thad assumes that the automatic fire sprinklers will not be maintained and fully
functional to actuate when a fire occurs and that firefighters will not respond to the alarm
in a timely manner. While this seems unlikely, Thad wants to make sure all facts of the
loss exposure have been considered. To determine the potential loss severity for the
chemical lab Thad is using the measure of - answerProbable Maximum Loss
Underwriters should examine the financial condition of potential insureds because -
answerThe financial state of a company is also a tangible measure of management
competence and resources available for effective risk control.
It is important for an underwriter to understand how the materials of a building are rated
for their fire resistance and flame spread ability. Flame spread refers to how readily
flames spread - answerHorizontally across the surfaces of a building's materials, such
as from one room to another.
Which one of the following has the greatest effect on how different types of construction
are classified? - answerMaterials for LBC
Underwriter Joe Hess is evaluating a building for insurance coverage. This exposure is
a four-story building of ordinary construction. The building is likely to present Joe with all
of the following problems, EXCEPT: - answerDifficulty in determining susceptibility to
wind damage
Noncombustible interior finishes that are relatively less combustible include all of the
following, EXCEPT: - answerPlastic wall coverings
When evaluating a submission for a building more than 20 years old, some underwriters
request a risk control inspection to verify the condition of the key elements of the
building. Which one of the following is most likely what an underwriter wants to verify,
, even with an older building that has been adequately maintained? - answerThat the roof
shingles and surfaces have been replaced within the last twenty to thirty years
Arthur requested a risk control survey to support his underwriting of a college dormitory.
Upon review of the survey report, he discovered that a number of problems had been
found, evidencing shoddy workmanship. The building had exposed electrical wiring,
stair landings constructed of particle board, and an inoperable sprinkler system. The
concrete block walls were penetrated by cables, without application of firestopping
material to restore the fire-resistance rating of the walls. Arthur declined to quote the
account, due to the building contractor's failure to comply with which one of the
following? - answerPerformance codes
Heating systems should be properly installed and maintained, as they represent a
common ignition source for habitational occupancies. Also, air conditioning ducts that
run throughout a building can quickly spread smoke and fire. Automatic dampers
installed in a habitational occupancy can help provide fire protection with respect to -
answerAC systems
If the city of Newburgh had a public protection class of 5, what is the best public
protection class that could be received by an individual property in Newburgh? -
answer5
Which one of the following major objectives of effective housekeeping is more important
for fire suppression than fire prevention? - answerRemoving obstructions
Active participation in a company's risk control program can be gained by linking it to the
company's - answerJob performance & appraisal system
Which one of the following statements is true regarding the construction of an insured
building and any exposing buildings? - answerWhen the exposing building is taller that
the insured building, the chances of an exposure fire increase.
Which one of the following statements concerning fire is correct? - answerThe
temperature required for combustion decreases as atmospheric pressure increases.
Which one of the following would be considered by an underwriter to increase the
likelihood of fire? - answerA. The insured's inexperienced maintenance staff performs
the annual maintenance work on the heating equipment.
Correct. The insured's inexperienced maintenance staff performs the annual
maintenance work on the heating equipment.
B. The insured uses forced air heating units with insulated ducts.
C. The insured uses wood-burning heating equipment and has it cleaned periodically by
qualified professionals.
D. The insured uses low profile portable heaters in its warehouse operations.
