CAIB 2 - CHAPTER 2 QUESTIONS AND ANSWERS ALREADY PASSED

CAIB 2 - CHAPTER 2 QUESTIONS AND ANSWERS ALREADY PASSED "Submission." A proposal for insurance that's presented to the underwriter for consideration. It can include an application, and additional verbal and written information (i.e., previous policy premium, loss details and history, financial statements and photos). Three purposes of survey forms. 1) Assists to identify loss exposures; 2) Helps eliminate purchase of coverage that isn't needed; 3) Assists in development of underwriting information the insurer needs. Three advantages of using a property checklist with clients. 1) Alerts broker to possible loss exposures; 2) Ensures needed coverages are not overlooked; 2) Helps reduce potential for an E&O claim. The type of commercial building construction that's likely to produce the highest insurance rate. Frame. The type of commercial building construction that's likely to produce the lowest insurance rate. Fire resistive. The age a building has to be for an insurer to request information about recent renovations or upgrading. 25 years or older. The five kinds of building upgrades to a building that are likely of most interest to insurers. 1) Roof; 2) Wiring; 3) Over-current protection; 4) Plumbing; 5) Heating. Five hazards common to most commercial property risks. 1) Heating; 2) Electrical services; 3) Detachment; 4) Protection; 5) Occupancy. Why the distance or detachment from other commercial risks is an important rating consideration. Because the proximity to other commercial buildings can increase the risk. The two kinds of protection that insurers consider when they establish a rate or premium. 1) Private protection - what the insured has done to prevent or reduce loss; 2) Public protection - the external protection provided to the property (e.g., availability of fire fighting services). "Fire resistive." A building that has met minimum standards in terms of hours it will withstand a specific, carefully controlled test fire. "Non-combustive." All structural members including floors, roofs and their supports are constructed of steel, iron, concrete or other non-combustible materials. Exterior also must be of non-combustible construction. Falls just short of "fire resistive". "Common hazards." Conditions common to all buildings that influence their potential for loss. "Detachment." The proximity of the building insured or that contains the property insured to other commercial buildings. "Adverse selection", and how it can impact an insurer's loss experience. Occurs when applicants for insurance are mainly those most likely to suffer a loss. Too many of these insureds will increase the insurer's overall claims.