357 QUESTIONS AND ANSWERS

CPCU 500 EXAM STUDY GUIDE newest with actual /

357 QUESTIONS AND ANSWERS/

In the context of identifying loss exposures, hazard analysis is a method

Select one:

• Used to identify loss exposures arising exclusively from

hazard risks.

• That identifies conditions that increase the frequency or

severity of loss.

• Used specifically for identifying previously unidentified loss

exposures.

• Used to quantify or value potential loss exposures. - ----

Answers---B. That identifies conditions that increase the frequency or severity of loss.

A commercial building may contain furniture, machinery and equipment, raw materials, and finished products. Which one of the following is the term generally used in property insurance policies to refer to all these types of property?

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Select one:

• Business personal property

• Commercial property

• Stock

• Inventory - ----Answers---A. Business personal property

In property insurance, the term "property in transit" refers to which one of the following?

Select one:

• Property while being moved from one building to another at

the insured location only

• Owned property while located anywhere other than the

insured location

• Mobile equipment while moving under its own power from

one work location to another

• Property while being transported by trucks, cars, buses,

trains, airplanes, and ships - ----Answers---D. Property while 2 / 4

being transported by trucks, cars, buses, trains, airplanes, and ships

For property insurance purposes, wall-to-wall carpeting is typically considered to be part of the building because it

Select one:

• Is easy to value.

• Is readily visible.

• Is permanently attached to the building.

• Tends to depreciate in value along with the building. - ----

Answers---C. Is permanently attached to the building.

Property insurance policies not only protect the property owner but also generally protect a secured lender's interest in the financed property by

Select one:

• Naming the lender on the owner's policy.

• Issuing a mortgagee interest-only policy. 3 / 4

• Sending the lender a letter of intent.

• Issuing a separate policy. - ----Answers---A. Naming the

lender on the owner's policy.

Which one of the following is an element of a loss exposure?

Select one:

• A cause of loss

• The verification of risk

• The probability of a loss

• The occurrence of a loss - ----Answers---A. A cause of

loss

A building contractor uses lower grade materials than called for in the specifications for an office building. A year after the building was completed, a balcony collapses, injuring several employees and customers and causing damage to the building and contents. For the building construction company, this is an example of

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