CPCU 551 Exam Questions Compilation

CPCU 551 Exam Questions Compilation A building had been vacant for 60 days, and the insurer didn't know about it, when it sustained 100K, 5K, and 1K losses due to windstorm, theft, and sprinkler leakage, respectively. What amount is covered under CPP? - 85K, 0, and 0. If a building is vacant for 60 or more consecutive days before the loss, they won't pay for any loss caused by vandalism, sprinkler leakage, building glass breakage, water damage, theft, or attempted theft... otherwise you'll only get 85% Various building design features can help prevent the spread of a hostile fire. For example, a solid piece of material that is inserted between wall studs to delay the flow of heat or fire through this open space is a - Fire stop. Pete insures his motorcycle rental property for $100,000 on an actual cash value (ACV) basis. The ACV of the property is $150,000 and his Commercial Insurance Policy (CIP) has a 90 percent coinsurance clause. A fire caused $50,000 of damage to the building structure. How much will Pete recoup under his insurance policy? - $37,037 A manufacturing company has business personal property valued at $1,500,000. The risk manager is considering insuring the business personal property with 80 percent coinsurance at a $0.40 rate per $100 of coverage. The 100 percent rate is $0.35 per $100 of coverage. if the business personal property is insured with an 80 percent coinsurance, how much premium will be saved? - The savings will be $5,250 − $4,800 = $450 When (if) can an insurer examine their insured's books and records? - Anytime during the policy period and up to 3 years after. The final premium is established after the policy period expires. Premiums are estimated at its formation. Can an insured transfer duties under common policy conditions? - Only with the insurer's written consent. Can an insurer cancel a policy verbally? How many days notice? To whom is it communicated? - No, it must be in writing. 10 days notice for nonpayment. 30 days for all other reasons. To the First Named Insured. Who develops a standard form? Who does a non-standard form typically favor? - The ISO, ASIS, or other insurance advisory organization. Non-standard forms typically favor insureds. Bridges, piers, wharves, and docks are initially excluded from the Building and Personal Property Coverage Form primarily because - They require careful underwriting Agreed Value optional coverage is often elected by risk averse firms in order to - Alleviate the risk of not complying with the Coinsurance condition. An insurance company recently leased a new office location in Dallas, Texas. On September 26, 2010, prior to occupying the building, the company spent $250,000 on building improvements. The useful life of these improvements was 10 years. On September 26, 2011, the improvements were destroyed and replaced