AU61 - Underwriting Organizations
Property Risks Practice Questions and
Correct Answers Updated
Question 1
Underwriters have difficulty predicting both the frequency and severity of earthquake
with any degree of accuracy. A key underwriting consideration for evaluating a
commercial property account for earthquake loss exposure would be
Correct Answer
Areas of earthquake activity
Question 2
Penn Woods Plazam a strip shopping center in PA, is classified as mill construction. Its
tenants include an accounting office, a Chinese restaurant, a pizza parlor, a nail salon,
and a dry cleaner. From a fire underwriting perspective, a property underwriter is
most likely to find this risk
Correct Answer
Desirable, because the structure would probably survive a severe fire
Question 3
The biggest difference between modified fire-resistive (class 5) and fire-resistive (class
6) is which one of the following?
Correct Answer
The fire rating of the material used in construction
Page 1 of 28
,Question 4
Load-bearing components of a building prevent its collapse. Bill, a property
underwriter, is reviewing an application for a convention center . The convention
center is a fire-resistive structure with load-bearing exterior walls that enclose the
building and support its weight and that of its contents. Bill is most likely to
Correct Answer
Request confirmation from the insured that the building contains columns to
provide additional vertical support of its weight - design and planned occupancy of
a building dictate the choice between walls and columns, but the load bearing
components of noncombustible and fire-resistive structures are usually columns
Question 5
Verifying the values of property exposed to a loss is an essential part of commercial
property underwriting. For example, if the property values shown on a commercial
property submission are higher than the property 's actual value, then
Correct Answer
The insured will pay for unnecessary coverage
Question 6
Special hazards of the class
Correct Answer
Are characteristics typical of all occupancies in a given class that can cause or
aggravate a loss
Question 7
The COPE model is a tool commonly used by underwriters to evaluate loss exposures
related to hostile building fires and other causes of loss. Of the four interdependent
risk characteristics that an underwriter reviews when evaluating a property
submission, which one of the following is the most important factor?
Correct Answer
Construction
Page 2 of 28
, Question 8
Self-service operations such as laundries and gas stations represent a significant
percentage of service industry occupancies. Although self-service equipment is
designed for easy operation, an underwriter might find such a business unacceptable
if a trained attendant is not on hand, due to the risk of
Correct Answer
Vandalism
Question 9
Which one of the following statements is truce regarding the flammable range of a
mixture?
Correct Answer
Combustion occurs most efficiently at or near the middle of the flammable range
Question 10
Aside from determining the value of a building, there are other underwriting
considerations related to verifying commercial property values. Which one of the
following statements regarding verifying property values is true?
Correct Answer
Underground foundations and plumbing must be given special consideration when
determining property values
Question 11
Which one of the following best describes a curtain wall?
Correct Answer
They are generally non-load bearing exterior walls
Question 12
The institutional occupancies category includes all of the following occupancies,
EXCEPT:
Correct Answer
Publishers
Page 3 of 28
Property Risks Practice Questions and
Correct Answers Updated
Question 1
Underwriters have difficulty predicting both the frequency and severity of earthquake
with any degree of accuracy. A key underwriting consideration for evaluating a
commercial property account for earthquake loss exposure would be
Correct Answer
Areas of earthquake activity
Question 2
Penn Woods Plazam a strip shopping center in PA, is classified as mill construction. Its
tenants include an accounting office, a Chinese restaurant, a pizza parlor, a nail salon,
and a dry cleaner. From a fire underwriting perspective, a property underwriter is
most likely to find this risk
Correct Answer
Desirable, because the structure would probably survive a severe fire
Question 3
The biggest difference between modified fire-resistive (class 5) and fire-resistive (class
6) is which one of the following?
Correct Answer
The fire rating of the material used in construction
Page 1 of 28
,Question 4
Load-bearing components of a building prevent its collapse. Bill, a property
underwriter, is reviewing an application for a convention center . The convention
center is a fire-resistive structure with load-bearing exterior walls that enclose the
building and support its weight and that of its contents. Bill is most likely to
Correct Answer
Request confirmation from the insured that the building contains columns to
provide additional vertical support of its weight - design and planned occupancy of
a building dictate the choice between walls and columns, but the load bearing
components of noncombustible and fire-resistive structures are usually columns
Question 5
Verifying the values of property exposed to a loss is an essential part of commercial
property underwriting. For example, if the property values shown on a commercial
property submission are higher than the property 's actual value, then
Correct Answer
The insured will pay for unnecessary coverage
Question 6
Special hazards of the class
Correct Answer
Are characteristics typical of all occupancies in a given class that can cause or
aggravate a loss
Question 7
The COPE model is a tool commonly used by underwriters to evaluate loss exposures
related to hostile building fires and other causes of loss. Of the four interdependent
risk characteristics that an underwriter reviews when evaluating a property
submission, which one of the following is the most important factor?
Correct Answer
Construction
Page 2 of 28
, Question 8
Self-service operations such as laundries and gas stations represent a significant
percentage of service industry occupancies. Although self-service equipment is
designed for easy operation, an underwriter might find such a business unacceptable
if a trained attendant is not on hand, due to the risk of
Correct Answer
Vandalism
Question 9
Which one of the following statements is truce regarding the flammable range of a
mixture?
Correct Answer
Combustion occurs most efficiently at or near the middle of the flammable range
Question 10
Aside from determining the value of a building, there are other underwriting
considerations related to verifying commercial property values. Which one of the
following statements regarding verifying property values is true?
Correct Answer
Underground foundations and plumbing must be given special consideration when
determining property values
Question 11
Which one of the following best describes a curtain wall?
Correct Answer
They are generally non-load bearing exterior walls
Question 12
The institutional occupancies category includes all of the following occupancies,
EXCEPT:
Correct Answer
Publishers
Page 3 of 28
