AU 61 Chapter 6 Exam Questions and Answers All Correct
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Module
AU 61
Institution
AU 61
AU 61 Chapter 6 Exam Questions and Answers All Correct
The point on the fault line at which movement of the earthen plates begins is an earthquake's
Select one:
A. Epicenter.
B. Focus.
C. Seismology.
D. Surge point. - Answer B. Focus.
The Richter scale measures the magnitude of an earthq...
AU 61 Chapter 6 Exam Questions
and Answers All Correct
The point on the fault line at which movement of the earthen plates begins is an
earthquake's
Select one:
A. Epicenter.
B. Focus.
C. Seismology.
D. Surge point. - Answer ✔ B. Focus.
The Richter scale measures the magnitude of an earthquake by the total amount of
Select one:
A. Damage caused.
B. Geography impacted.
C. Time or duration.
D. Energy released. - Answer ✔ D. Energy released.
Volcanic action losses are loss exposures that an underwriter must be aware of since it
is covered in most property forms. The most practical way an underwriter can minimize
this exposure is to
Select one:
A. Underwrite only those risks with other coverages with the company.
B. Insist on risk control practices that will protect from this type loss.
C. Refrain from writing property insurance in states with this exposure.
D. Write policies with large deductible for volcanic action exposure. - Answer ✔ C.
Refrain from writing property insurance in states with this exposure.
Volcanic eruptions, which are discharges from vents in the earth's crust, cause all of the
following types of insured losses, EXCEPT:
Select one:
A. Lava flow
B. Volcanic ash
C. Airborne shock waves
D. Water damage - Answer ✔ D. Water damage
The only practical way for insurers to avoid insuring the volcanic action exposure is to
Select one:
A. Participate in insurance pools to spread the impact of losses.
B. Use exclusions to reduce the potential amount of a loss.
C. Refrain from writing property insurance in states with volcanoes.
, D. Reinsure the exposure. - Answer ✔ C. Refrain from writing property insurance in
states with volcanoes.
Windstorm and hail are difficult causes of loss to underwrite. To limit the consequences
of losses that might occur as a result of these perils, the underwriter must first
Select one:
A. Identify susceptible geographic areas with this exposure.
B. Enter into reinsurance treaties to protect against major losses.
C. Become a member of insurance pools to provide the coverage.
D. Limit these causes of loss to commercial package policies. - Answer ✔ A. Identify
susceptible geographic areas with this exposure.
A hurricane has wind speeds of at least
Select one:
A. 10 miles per hour.
B. 30 miles per hour.
C. 50 miles per hour.
D. 75 miles per hour. - Answer ✔ D. 75 miles per hour.
Which one of the following is the most common cause of sprinkler system leakage?
Select one:
A. Overheating
B. Improper maintenance
C. Deterioration due to age
D. Freezing - Answer ✔ D. Freezing
Automatic sprinklers provide the most effective protection against loss by fire, however
underwriters should not overlook the sprinkler leakage loss exposure. Underwriting
considerations for evaluating an account for sprinkler leakage exposures include which
one of the following?
Select one:
A. Average number of employees on site at one time
B. Type of construction of the building being protected
C. Other available fire protection systems in place
D. Susceptibility of contents to water damage - Answer ✔ D. Susceptibility of contents to
water damage
Which one of the following would be most important to an underwriter while underwriting
a property risk and considering causes of loss that arise from exposure to the forces of
nature?
Select one:
A. The geographical spread of risk
B. Risk control activity
C. Other lines of business written
D. Agency relationship - Answer ✔ A. The geographical spread of risk
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