AU 61
Straight-through processing (STP) - answer Automatic processing of the underwriting
transaction from initial application through policy processing.
Major causes of loss - answer fire, theft, windstorm, hail, flood, civil commotion,
terrorism, vandalism, explosion, sinkhole, mine subsidence, earthquake, volcanic
action, water line leakage, collapse, cloud outage, data breach, and cyber attack.
Fire - answera product of combustion as well as form of oxidation. Requires oxygen,
fuel, heat, and an uninterrupted chain reaction.
Heat sources - answer Chemical, Electrical, Mechanical, Nuclear, or incendiary
(intentional).
Continuing expenses vs Extra expense - answer Continuing is like salaries, utilities, rent
payment. Extra is cost of moving to temporary location and rental equipment.
noncombustible - answerBurns only at extremely high temperatures
combustible - answerburn at typical fire-conditions but don't ignite
flammable - answerable to catch fire easily
Fuel Load - answerThe total quantity of combustible contents of a building, space, or
fire area, including interior finish and trim, expressed in heat units of the equivalent
weight in wood. Weight of combustibles per SQ FT
Flash point - answerMinimum temperature at which a liquid gives off enough vapors to
form an ignitable mixture with air near the liquid's surface.
The extent to which a business depends on a particular piece of property varies
according to all of the following, EXCEPT: - answerIts protection class rating
Fee Simple Estate - answerAbsolute ownership with all the rights associated with
ownership of real property.At Ellen's death, Sharon, if living, will retain outright
ownership of the property. If Sharon dies before Ellen, the property will pass to Sharon's
brother, Patrick.
At Ellen's death, what type of interest does Sharon have in the property being used by
Ellen?
,Joint Tenancy - answerThe joint ownership of property by two or more co-owners in
which each co-owner owns an undivided portion of the property. On the death of one of
the joint tenants, his or her interest automatically passes to the surviving joint tenants.
Remainder Estate - answerThe ownership interest subsequent to a life estate which,
upon the death of the life estate owner, becomes a fee simple absolute interest.
Remainderman - answerOne entitled to receive a remainder interest in some estate
sometime in the future.
replacment cost - answerThe cost to repair or replace property using new materials of
like kind and quality.
ACV (Actual Cash Value) - answerreplacement cost - depreciation
Insurance Value - answerInsurance written for an amount approximating the full value of
the asset(s) insured.
Coinsurance Clause - answerA provision that states that the insurer and the insured will
share the losses covered by the policy in a proportion agreed upon in advance.
Coinsurance Formula - answer(amount of insurance carried/amount of insurance
required) x loss = amount of recovery
Agreed Value optional coverage - answerOptional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
Blanket Insurance - answerA single property insurance policy that provides coverage for
multiple classes of property at one location, or provides coverage for one or more
classes of property at multiple locations.
Blanket Limit - answerThe maximum dollar amount the insurer will pay for two or more
items or classes of property at one or more locations.
Inflation Guard optional coverage - answerCoverage for the effects of inflation that
automatically increases the limit of insurance by the percentage of annual increase
shown in the declarations.
Amount Subject - answerThe total value exposed to loss at any one location from any
one event
Normal Loss Expectancy (NLE) - answerLoss expected under normal operating
conditions with all fire protection services working
, Probable Maximum Loss (PML) - answerThe largest loss that an insured is likely to
sustain
Maximum Foreseeable Loss (MFL) - answerAn estimate of the financial cost of the loss
that would occur if all protection measures were to fail and no effective fire dept
response occurred.
Fire division - answerA section of a structure so well protected that fire cannot spread
from that section to another, or vice versa
Fire Wall - answerA floor-to-roof wall made of noncombustible materials and having no
open doors, windows, or other spaces through which fire can pass
COPE - answerConstruction, Occupancy, Protection, and External Exposures
Public fire protection - answerFire protection equipment and services made available
through governmental authority to all properties within a defined area
Private fire protection - answerMeasures taken by property owners to protect their
assets from loss by fire.
External Exposure - answerA loss exposure outside the area owned or controlled by the
insured
Class 1 - Frame - answerExterior walls, floors and roof are constructed with wood.
Class 2 - Joisted Masonry - answerThese structures have outside support walls made
of noncombustible masonry materials (such as concrete, brick, stone or tile) and a roof
and floor made of combustible materials (such as wood). No more than 6 stories high.
Up to 3 hour fire rating. exterior walls were solid brick and concrete. The interior walls,
roof and flooring were all constructed of combustible materials.
Class 3 - Noncombustible - answerExterior walls, floors, and roof are constructed of and
supported by noncombustible materials such as metal,steel, asbestos, or gypsum
Class 4 - Masonry Noncombustible - answerExterior walls constructed of masonry
materials like concrete and a roof and floor made of metal or other noncombustible
materials. 1 hour fire rating.
Class 5 - Modified Fire Resistive - answermade of masonry or fire resistive material with
fire resistance rating 2 hours or less
Class 6 - Fire Resistive - answermade of masonry or fire resistive materials with fire
resistance rating 2 hours or more
parapets - answervertical extension of a fire wall that extends above a roofline.
Straight-through processing (STP) - answer Automatic processing of the underwriting
transaction from initial application through policy processing.
Major causes of loss - answer fire, theft, windstorm, hail, flood, civil commotion,
terrorism, vandalism, explosion, sinkhole, mine subsidence, earthquake, volcanic
action, water line leakage, collapse, cloud outage, data breach, and cyber attack.
Fire - answera product of combustion as well as form of oxidation. Requires oxygen,
fuel, heat, and an uninterrupted chain reaction.
Heat sources - answer Chemical, Electrical, Mechanical, Nuclear, or incendiary
(intentional).
Continuing expenses vs Extra expense - answer Continuing is like salaries, utilities, rent
payment. Extra is cost of moving to temporary location and rental equipment.
noncombustible - answerBurns only at extremely high temperatures
combustible - answerburn at typical fire-conditions but don't ignite
flammable - answerable to catch fire easily
Fuel Load - answerThe total quantity of combustible contents of a building, space, or
fire area, including interior finish and trim, expressed in heat units of the equivalent
weight in wood. Weight of combustibles per SQ FT
Flash point - answerMinimum temperature at which a liquid gives off enough vapors to
form an ignitable mixture with air near the liquid's surface.
The extent to which a business depends on a particular piece of property varies
according to all of the following, EXCEPT: - answerIts protection class rating
Fee Simple Estate - answerAbsolute ownership with all the rights associated with
ownership of real property.At Ellen's death, Sharon, if living, will retain outright
ownership of the property. If Sharon dies before Ellen, the property will pass to Sharon's
brother, Patrick.
At Ellen's death, what type of interest does Sharon have in the property being used by
Ellen?
,Joint Tenancy - answerThe joint ownership of property by two or more co-owners in
which each co-owner owns an undivided portion of the property. On the death of one of
the joint tenants, his or her interest automatically passes to the surviving joint tenants.
Remainder Estate - answerThe ownership interest subsequent to a life estate which,
upon the death of the life estate owner, becomes a fee simple absolute interest.
Remainderman - answerOne entitled to receive a remainder interest in some estate
sometime in the future.
replacment cost - answerThe cost to repair or replace property using new materials of
like kind and quality.
ACV (Actual Cash Value) - answerreplacement cost - depreciation
Insurance Value - answerInsurance written for an amount approximating the full value of
the asset(s) insured.
Coinsurance Clause - answerA provision that states that the insurer and the insured will
share the losses covered by the policy in a proportion agreed upon in advance.
Coinsurance Formula - answer(amount of insurance carried/amount of insurance
required) x loss = amount of recovery
Agreed Value optional coverage - answerOptional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
Blanket Insurance - answerA single property insurance policy that provides coverage for
multiple classes of property at one location, or provides coverage for one or more
classes of property at multiple locations.
Blanket Limit - answerThe maximum dollar amount the insurer will pay for two or more
items or classes of property at one or more locations.
Inflation Guard optional coverage - answerCoverage for the effects of inflation that
automatically increases the limit of insurance by the percentage of annual increase
shown in the declarations.
Amount Subject - answerThe total value exposed to loss at any one location from any
one event
Normal Loss Expectancy (NLE) - answerLoss expected under normal operating
conditions with all fire protection services working
, Probable Maximum Loss (PML) - answerThe largest loss that an insured is likely to
sustain
Maximum Foreseeable Loss (MFL) - answerAn estimate of the financial cost of the loss
that would occur if all protection measures were to fail and no effective fire dept
response occurred.
Fire division - answerA section of a structure so well protected that fire cannot spread
from that section to another, or vice versa
Fire Wall - answerA floor-to-roof wall made of noncombustible materials and having no
open doors, windows, or other spaces through which fire can pass
COPE - answerConstruction, Occupancy, Protection, and External Exposures
Public fire protection - answerFire protection equipment and services made available
through governmental authority to all properties within a defined area
Private fire protection - answerMeasures taken by property owners to protect their
assets from loss by fire.
External Exposure - answerA loss exposure outside the area owned or controlled by the
insured
Class 1 - Frame - answerExterior walls, floors and roof are constructed with wood.
Class 2 - Joisted Masonry - answerThese structures have outside support walls made
of noncombustible masonry materials (such as concrete, brick, stone or tile) and a roof
and floor made of combustible materials (such as wood). No more than 6 stories high.
Up to 3 hour fire rating. exterior walls were solid brick and concrete. The interior walls,
roof and flooring were all constructed of combustible materials.
Class 3 - Noncombustible - answerExterior walls, floors, and roof are constructed of and
supported by noncombustible materials such as metal,steel, asbestos, or gypsum
Class 4 - Masonry Noncombustible - answerExterior walls constructed of masonry
materials like concrete and a roof and floor made of metal or other noncombustible
materials. 1 hour fire rating.
Class 5 - Modified Fire Resistive - answermade of masonry or fire resistive material with
fire resistance rating 2 hours or less
Class 6 - Fire Resistive - answermade of masonry or fire resistive materials with fire
resistance rating 2 hours or more
parapets - answervertical extension of a fire wall that extends above a roofline.
