AU 61 Flashcards
Contents
Personal property that is usually contained in a building or other structure.
Commercial package policy (CPP)
Policy that covers two or more lines of business by combining ISO’s commercial lines coverage parts.
Business owners policy
A package policy that combines most of the property and liability coverage needed by small and medium size business.
Output policy
A policy that combines, in one form and associated endorsements, all or most of the commercial property coverages that the insured organization needs, and uses a flexible rating plan.
Predictive modeling
A process in which historical data based on behaviors and events are blended with multiple variables and used to construct models of anticipated future events.
Insurable interest
An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred.
Factual expectancy
A situation in which a party experiences an economic advantage if an insured event does not occur or, conversely, economic harm if the event does occur.
Fee simple estate
A full ownership interest in property with the unconditional right to dispose of it.
Joint tenancy
A concurrently owned and undivided interest in an estate that transfers to a surviving joint tenant upon the death of the other.
Life tenant (life estate)
A person entitled to exclusive possession of real property and to all income the land produces for the duration of that person’s or someone else’s life; terminates on the death of the life tenant and does not pass to his or her estate.
Remainder estate
The right granted an individual to hold an estate following the death of the life tenant.
Remainderman
The individual who acquires an estate following the death of a life tenant and who acquires a fee simple estate in the property.
Replacement cost
The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation.
Actual cash value (ACV)
Cost to replace property with new property of like kind and quality less depreciation.
Functional valuation method
A valuation method in which the insurer is required to pay no more than the cost to repair or replace the damaged or destroyed property with property that is its functional equivalent.
Insurance to value
Insurance written for an amount approximating the full value of the asset insured.
Coinsurance condition
A condition that requires the insured to carry insurance equal to at least a specified percentage of the actual cash value of the property insured.
Insurance-to-value provision
A provision in property insurance policies that encourages insureds to purchase an amount of insurance that is equal to, or close to, the value of the covered property.
Agreed Value optional coverage
Optional coverage that suspends the coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured.
Blanket insurance
Insurance that covers either of the following with one limit of insurance: (1) one type of property in one or more separately rated buildings or (2) two or more types of property in one or more separately rated buildings.
Blanket limit
The max dollar amount the insurer will pay for two or more items or classes of property at one or more locations.
Inflation Guard optional coverage
Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.
Agreed Value method
A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the max amount that will be paid in the event of a total loss.
Market value
The price at which a particular piece of property could be sold on the open market by an unrelated buyer or seller.
Fire- resistive construction
A class of construction that has exterior walls, floors, and roofs of masonry or other fire-restive material with a fire-resistance rating of at least two hours.
Noncombustible construction
A class of construction in which the exterior walls, floor, and roof of a building are constructed of, and supported by, metal, gypsum, or other noncombustible materials.
Masonry noncombustible construction
Masonry construction or construction that includes exterior walls of fire-resistive construction with a fire-resistance rating of less than one hour.
Frame construction
A class of construction that has load-bearing components made of wood or other combustible materials such as brick or stone veneer.
Construction
The type of materials and design used to fabricate a building, which underwriters analyze when evaluating submissions for property insurance.
Occupancy
The type or character of use of the property in question.
Protection
Measures taken to prevent or reduce the damage done by fire.
Public fire protection
Fire protection equipment and services made available through governmental authority to all properties within a defined area.
Private fire protection
Measures taken by property owners to protect their assets from loss by fire.
External exposure
A loss exposure outside the area owned or controlled by the insured.
Fire resistance
The ability of a building or material to withstand the effects of or give protection from fire.
Fuel load (fire load)
The expected max amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per square foot.
Flame spread
The speed with which a gas fire consuming an interior construction material or finish material spreads, as determined in a test environment; one factor used to develop fire rating.
Load-bearing components
The parts of a building that carry the weight of the structure and its contents.
Specific rating
A rating method that bases a buildings property insurance rate on a physical inspection during which the structural features are identified and evaluated according to published standards.
Firestop
An element of construction inserted in a concealed space (wall or roof area) that prevents the passage of flame from one point to another; used to help contain fires and increase the chance of extinguishing the flames.
Mild construction
A sub classification of joisted masonry construction that uses heavy timber for columns, beams, supports, and ties. Has a minimum two hour fire resistance rating on bearing walls and has an absence of floor joists.
Modified fire-resistive construction
A class of construction that has exterior walls, floors, and roofs of masonry or other fire-resistive materials with a fire-resistance rating of one to two hours.
High-rise building
Any structure taller than seventy five feet (National Fire Protection Association definition), or a building taller than the tallest ladder available to the fire service.
Fire division
A section of a structure so well protected that fire cannot spread from that section to another, or vice versa.
Fire wall
A floor to roof wall made of noncombustible materials and having no open doors, windows, or other spaces through which fire can pass.
Parapet
A vertical extension of a fire wall that extends above a roofline.
Curtain Board
A partial fire wall that, when installed in conjunction with roof vents, helps contain hot smoke and gases and aids exterior venting to simplify fire suppression
Fire door
A door made of fire resistant material that can be closed to prevent the spread of fire.
Interior finish
Materials used to form the exposed interior surfaces of walls and ceilings; includes carpets, ceiling tiles, wallboard, insulating materials, and decorative materials.
Flashover
A stage in the development of a contained fire in which all exposed surfaces reach ignition temperature at approx the same time, causing fire to spread rapidly throughout the space.
Class rate
A type of insurance rate that applies to all insureds in the same rating category or rating class.
Specific rate
An insurance rate that is developed by ISO filed reps through a physical visit to a property and development of an individual advisory loss cost.
Risk control report
A record that contains account information gathered as a result of a physical inspection by an insurer’s risk control rep specifically at the request of an underwriter.
Building codes
Local ordinances or state statues that regulate the construction of buildings within a municipality, country or state.
Prescriptive codes
A building code that states in detail the size, type, and installation techniques for all structural and other building components.
Performance codes
A building code that establishes criteria that structural and other building components must meet.
Basic occupancy charge
A rating system factor that reflects the relative hazard of an occupancy for pricing purposes and is expressed as a percentage of the base rate (ranges from 10 to 1000 percent)
Combustibility
The ability of something to ignite and burn; a major determinant of the overall fire hazard
Susceptibility
The extent to which fire and its effects will cause damage to materials
Common hazards
Hazards existing in almost every class of business occupancy, usually referring specifically to (1) housekeeping, (2) hearing equipment, (3) electrical equipment, and (4) smoking
Special hazards of the class
A characteristic typical of all occupancies in a given class that can cause or aggravate a loss. An example is the hazard of cooking, common to the restaurant class
Special hazards of the risk
A condition that can cause loss but that is not typical of an occupancy. An example is the use of a welding torch in an auto repair shop.
Ignition source
Item, substance, process, or event capable of causing a fire or explosion, such as open flames, sparks, or static electricity.
Friction
The heat and static electricity generated when two surfaces rub together.
Static electricity
An electrical charge that is generated when two surfaces rub together in a clear, dry, atmosphere
Spontaneous heating
An oxidation process in which the temperature of a material is increased without drawing heat from its surroundings.
Opportunity Cost
The difference between the maximum profit that an investor could have made from an alternative investment and the profit the investor has actually made from the investment.
Watch service system
A type of private fire detection system in which individuals are employed to patrol premises when a business is closed.
Watchclock system
A type of private fire detection system in which security personnel make regular rounds of a premises and record visits to each station along the patrol route by inserting a special key in a clock or by using magnetic key cards.
Merchant police system
A type of private detection system that uses guards who patrol a route and cover a number of properties and control burglary. robbery, and fire losses; the guards usually check only the exterior of the building after the business is closed.
Automatic detection system
A fire detection system that consists of mechanical or electronic detectors that sense the presence of smoke or fire and sound an alarm.
Local fire alarm system
A detection system, triggered by smoke or heat, that sounds a bell, siren, or another alert at the premises only.
Remote system (remote station system)
A type of automatic fire detection system in which a detector connects to the local police or fire station, which continuously monitors the system.
Central station system
A private detection service that monitors the systems of multiple businesses and/or residences and that calls appropriate authorities or dispatches its own personnel when an alarm is activated.
Proprietary alarm system
A type of alarm system that sends an alarm to a monitoring station located at the protected premises or another location of the property owner.
Private fire suppression system
A system that consists of equipment and personnel that the insured uses to suppress a fire before the municipal fire service arrives.
Portable fire extinguisher
A category of fire suppression equipment that permits employees to control a fire by using hand-held device while waiting for the fire service to arrive, or to extinguish small fires.
Standpipe and hose system
A category of fire suppression equipment that consists of water main with fire department hose connections inside a building; used in buildings with expansive floor areas and buildings more than four stories tall.
Automatic sprinkler system
Fire sprinkler systems with a series of interconnected valves and pipes with sprinkler heads. Each sprinkler head usually contains a heat-sensing element that responds individually to the heat generated by a fire.
Wet pipe sprinkler systems
Automatic fire sprinkler system with pipes that always contain water under pressure, which is released immediately when a sprinkler head opens.
Dry pipe sprinkler systems
Automatic fire sprinkler system with pipes that contain compressed air or another inert gas that holds a valve in the water line shut until an open sprinkler head releases the gas and allows water to flow through the previously dry pipe to another sprinkler head.