IREM CPM EVALUATION EXAM 2025 QUESTIONS AND
ANSWERS RATED A+
✔✔A 20-unit condo building on the outskirts of St. Paul, Minn., has weathered a
particularly long cold spell. Once the temperature moderates, there is a water-line break
on the ground floor near an outside wall. The water line break has occurred between
two units.
The only insurance required by the CC&Rs is a "bare walls" policy, covering the
unfinished ceiling, unfinished floor, and unfinished walls. Unfortunately there is water
damage to the both the neighboring unit owners' furniture and kitchen cabinets. In one
unit a wallpapered wall is damaged.
1. Under the "bare walls" policy of this association what would the association be
responsible for?
2. What is the owners' responsibility?
3. Who handles mold remediation if necessary? - ✔✔1. Answers will vary depending on
the circumstances of the insurance coverage and definitions in the governing
documents.
2. Answers will vary depending on the circumstances of the insurance coverage and
definitions in the governing documents.
3. Answers will vary depending on the circumstances of the insurance coverage and
definitions in the governing documents.
✔✔What is the difference between property and liability coverage? - ✔✔Commercial
Liability Insurance (sometimes called Casualty Insurance) is coverage that offers
protection against claims that allege that a property owner's negligence or inappropriate
action resulted in bodily injury or property damage to another party.
Property (Hazard) Insurance—also known as All Risk (formerly Multiperil), Open Cause
of Loss, or Risk of Direct Physical Loss—includes coverage for accidental, direct
physical loss to the property of the insured from any event that is not specifically
excluded or limited.
✔✔What are insurance requirements when working with contractors? - ✔✔If
independent contractors are hired to work at the property, having an indemnification
(hold harmless) clause in the contract is essential. The contractor should also be
bonded as a guarantee of performance (surety) and provide a certificate of insurance
that lists the coverage carried and shows the property owner and the management
company as additional named insured parties.
✔✔Under what circumstances can an insurance policy be cancelled? - ✔✔-
Nonpayment of premiums
- Hazards found during inspection (e.g., flammable materials, toxic wastes)
,- Deterioration of the insurer's risk, either physical or moral (e.g., change of use or
occupancy)
- Misrepresentation prior to the issuance of the policy
- Filing many small claims or one large claim
- Environmental risks such as proximity to brush fire conditions in Western states, and
hurricanes in the Gulf and Atlantic states
✔✔What procedures should be followed in the event of an incident at the property? -
✔✔Complete an Incident Report
Report to the Insurance Company
File a Claim
Personal Loss
- Ensure immediate aid is given to an injured person or people.
- Call emergency personnel for assistance.
- Obtain the names and addresses of people involved and witnesses. Write down the
name of everyone you see at the site of the loss in case you need to contact them later.
Capture who, what, where, how, why.
- Do not discuss the incident with anyone other than your insurance representative or
attorney.
- Report a crime to the police, and let them take any necessary statements for the police
report.
- Call your insurance company. Check your policy for requirements about reporting a
loss. Some policies have time limits in which to file claims.
Property Loss
- Make any temporary repairs to protect the property from further damage or to protect
people from additional injuries.
- Arrange for a claims adjuster to inspect the property. Ensure that the claims adjuster
who arrives at your property has the proper authority to investigate. The adjuster must
be an official representative of your insurance company. Public adjusters often arrive on
the scene of a fire or accident and offer their services even though the insurance
carriers do not duly authorize them.
- Prepare a list of lost or damaged articles. Include diagrams, photographs, or
videotapes, if possible.
- File a signed and sworn Proof of Loss form.
✔✔List the specific risks in this scenario. - ✔✔Answers may include:
It is not a good policy for any representative of the CID to boast "We've never had a
crime here, and we never will." This could be construed as advertising security. Any
problems arising with regard to security could lead to charges of false advertising and
breach of promise.
Posted schedule of checkpoints. This is another vulnerable area. To the extent the
schedule is adhered to, anyone could determine a time and place to commit a crime on
the premises when the doorman would not be present.
, Discontinuance of doorman service. Discontinuing such an established service would
be considered a mistake. Once you offer a service to residents, they come to believe
that their rent naturally includes it. Also, a buzzer system alone is not very modern.
✔✔Identify practices that might help reduce the association's exposure to risk. -
✔✔Answers may include:
- A phone system and camera surveillance would offer more security in the absence of
a doorman.
- All security schedules should be kept in a locked cabinet, out of sight of visitors. Only
the manager and head of security should have access to the schedule.
✔✔What are typical elements of building security? - ✔✔Limiting access to the inside of
the building, and educating residents and guests about not letting strangers into the
building can significantly reduce problems.
- Sturdy and properly installed doors
- Heavy-duty locks
- Inexpensive measures, such as installing emergency alarms and putting mirrors in
elevators
- Parking gates, with or without courtesy patrols
- Peepholes are for personal protection.
- Key Control
- Adequate Lighting
✔✔What are advantages and disadvantages of using courtesy patrols? - ✔✔-
Advantages
- Many states require that those who work as courtesy patrols complete a certain level
of training, hold a license, and carry special insurance.
- The contracted service usually employs trained personnel and provides its own
insurance for liability.
- The contractor also arranges for replacement personnel if an employee becomes ill or
leaves the job.
- The contracted service partially mitigates the property's liability.
Disadvantages
- Contracted services can be more expensive than using in-house personnel.
- The management company has less direct control over the quality of the personnel
and their scheduling. The courtesy patrol contract should stipulate certain standards,
such as experience and training.
- Contracted personnel will be less familiar with the property, although that can be
remedied by providing orientation information to the contractor,incorporating scheduling
and personnel selection criteria into the contract, and requiring regular assignment of
the same people.
- Management must monitor the courtesy patrol service, and it may have to experiment
with different companies to obtain the service desired.
ANSWERS RATED A+
✔✔A 20-unit condo building on the outskirts of St. Paul, Minn., has weathered a
particularly long cold spell. Once the temperature moderates, there is a water-line break
on the ground floor near an outside wall. The water line break has occurred between
two units.
The only insurance required by the CC&Rs is a "bare walls" policy, covering the
unfinished ceiling, unfinished floor, and unfinished walls. Unfortunately there is water
damage to the both the neighboring unit owners' furniture and kitchen cabinets. In one
unit a wallpapered wall is damaged.
1. Under the "bare walls" policy of this association what would the association be
responsible for?
2. What is the owners' responsibility?
3. Who handles mold remediation if necessary? - ✔✔1. Answers will vary depending on
the circumstances of the insurance coverage and definitions in the governing
documents.
2. Answers will vary depending on the circumstances of the insurance coverage and
definitions in the governing documents.
3. Answers will vary depending on the circumstances of the insurance coverage and
definitions in the governing documents.
✔✔What is the difference between property and liability coverage? - ✔✔Commercial
Liability Insurance (sometimes called Casualty Insurance) is coverage that offers
protection against claims that allege that a property owner's negligence or inappropriate
action resulted in bodily injury or property damage to another party.
Property (Hazard) Insurance—also known as All Risk (formerly Multiperil), Open Cause
of Loss, or Risk of Direct Physical Loss—includes coverage for accidental, direct
physical loss to the property of the insured from any event that is not specifically
excluded or limited.
✔✔What are insurance requirements when working with contractors? - ✔✔If
independent contractors are hired to work at the property, having an indemnification
(hold harmless) clause in the contract is essential. The contractor should also be
bonded as a guarantee of performance (surety) and provide a certificate of insurance
that lists the coverage carried and shows the property owner and the management
company as additional named insured parties.
✔✔Under what circumstances can an insurance policy be cancelled? - ✔✔-
Nonpayment of premiums
- Hazards found during inspection (e.g., flammable materials, toxic wastes)
,- Deterioration of the insurer's risk, either physical or moral (e.g., change of use or
occupancy)
- Misrepresentation prior to the issuance of the policy
- Filing many small claims or one large claim
- Environmental risks such as proximity to brush fire conditions in Western states, and
hurricanes in the Gulf and Atlantic states
✔✔What procedures should be followed in the event of an incident at the property? -
✔✔Complete an Incident Report
Report to the Insurance Company
File a Claim
Personal Loss
- Ensure immediate aid is given to an injured person or people.
- Call emergency personnel for assistance.
- Obtain the names and addresses of people involved and witnesses. Write down the
name of everyone you see at the site of the loss in case you need to contact them later.
Capture who, what, where, how, why.
- Do not discuss the incident with anyone other than your insurance representative or
attorney.
- Report a crime to the police, and let them take any necessary statements for the police
report.
- Call your insurance company. Check your policy for requirements about reporting a
loss. Some policies have time limits in which to file claims.
Property Loss
- Make any temporary repairs to protect the property from further damage or to protect
people from additional injuries.
- Arrange for a claims adjuster to inspect the property. Ensure that the claims adjuster
who arrives at your property has the proper authority to investigate. The adjuster must
be an official representative of your insurance company. Public adjusters often arrive on
the scene of a fire or accident and offer their services even though the insurance
carriers do not duly authorize them.
- Prepare a list of lost or damaged articles. Include diagrams, photographs, or
videotapes, if possible.
- File a signed and sworn Proof of Loss form.
✔✔List the specific risks in this scenario. - ✔✔Answers may include:
It is not a good policy for any representative of the CID to boast "We've never had a
crime here, and we never will." This could be construed as advertising security. Any
problems arising with regard to security could lead to charges of false advertising and
breach of promise.
Posted schedule of checkpoints. This is another vulnerable area. To the extent the
schedule is adhered to, anyone could determine a time and place to commit a crime on
the premises when the doorman would not be present.
, Discontinuance of doorman service. Discontinuing such an established service would
be considered a mistake. Once you offer a service to residents, they come to believe
that their rent naturally includes it. Also, a buzzer system alone is not very modern.
✔✔Identify practices that might help reduce the association's exposure to risk. -
✔✔Answers may include:
- A phone system and camera surveillance would offer more security in the absence of
a doorman.
- All security schedules should be kept in a locked cabinet, out of sight of visitors. Only
the manager and head of security should have access to the schedule.
✔✔What are typical elements of building security? - ✔✔Limiting access to the inside of
the building, and educating residents and guests about not letting strangers into the
building can significantly reduce problems.
- Sturdy and properly installed doors
- Heavy-duty locks
- Inexpensive measures, such as installing emergency alarms and putting mirrors in
elevators
- Parking gates, with or without courtesy patrols
- Peepholes are for personal protection.
- Key Control
- Adequate Lighting
✔✔What are advantages and disadvantages of using courtesy patrols? - ✔✔-
Advantages
- Many states require that those who work as courtesy patrols complete a certain level
of training, hold a license, and carry special insurance.
- The contracted service usually employs trained personnel and provides its own
insurance for liability.
- The contractor also arranges for replacement personnel if an employee becomes ill or
leaves the job.
- The contracted service partially mitigates the property's liability.
Disadvantages
- Contracted services can be more expensive than using in-house personnel.
- The management company has less direct control over the quality of the personnel
and their scheduling. The courtesy patrol contract should stipulate certain standards,
such as experience and training.
- Contracted personnel will be less familiar with the property, although that can be
remedied by providing orientation information to the contractor,incorporating scheduling
and personnel selection criteria into the contract, and requiring regular assignment of
the same people.
- Management must monitor the courtesy patrol service, and it may have to experiment
with different companies to obtain the service desired.
