CMCA Exam Questions With Correct
Answers
Aggregate - ANSWER- a maximum amount an insurer will reimburse a policyholder for
all covered losses during a set time period, usually one year.
Risk Management - ANSWER- Identifying, assessing, responding to risk by reducing,
removing, and insuring threats
Risk Inventory - ANSWER- Contacts, resources, areas to inspect & keep record of
Immediate exposers to risk - ANSWER- Severe weather, deficiencies, negligence
Speed of Response - ANSWER- Authorization, information, money, equipment,
personnel, schedule
Types of Exposure - ANSWER- Property, Net Income, Liability, Personnel
Property Exposures - ANSWER- physical damages to property
Net Income exposures - ANSWER- Unexpected increase in cost/money
Personnel Exposures - ANSWER- death, retirement, resignation
Liability Exposures - ANSWER- 3rd party claims against association. (worker injured
and suing ex)
Liability Insurance Coverages - ANSWER- Bodily injury, property damage, personnel
injury (said/did), advertising injury (written/published)
D&O Insurance - ANSWER- Wrongful acts by association/board, negligence, omission,
monetary (devalued), non-monetary(freedom)
Community Manager role in Risk Responsibility - ANSWER- Identify, review, monitor
risk, inform Board, oversee insurance.
Insurance Agent - ANSWER- sells insurance, works for single carrier
Insurance broker - ANSWER- Sells insurance, works with multiple carriers
Loss Frequency - ANSWER- Number of times loss may occur
Loss Severity - ANSWER- expected $ loss from event.
Risk Control - ANSWER- reduce or eliminate exposure
,Risk Financing - ANSWER- Options to cover $ of loss
Exposure avoidance - ANSWER- eliminating chance of loss
Loss Prevention - ANSWER- reducing likelihood of loss (training, inspections)
Loss Reduction - ANSWER- reducing severity of loss (fire sprinkler)
Contractual Transfer - ANSWER- shift loss from association to other (ex. vendor,
insurance)
Risk Retention - ANSWER- association finds way to pay for losses
Risk Transfer - ANSWER- association finds way to transfer responsibility to another
party
Funding to pay for losses: Current expensing - ANSWER- shifting cost from one GL to
another
Funding to pay for losses: Funded Reserve - ANSWER- pull from reserves to cover cost
Funding to pay for losses: Unfunded expense. - ANSWER- Special assessment to
cover cost
Funding to pay for losses: Borrowing - ANSWER- Taking out a loan/credit to cover
expense
Decision Matrix: Risk Retention - ANSWER- Low frequency, low severity
Decision Matrix: Risk Transfer - ANSWER- Low frequency, High severity
Decision Matrix: Risk Control - ANSWER- High frequency, low severity
Decision Matrix: Combination - ANSWER- High frequency, High severity
Screening Bidders for Insurance - ANSWER- Policies tailored to your needs, HOA
experience, carrier ratings.
RFP Components for Insurance - ANSWER- Intro, contacts, instruction/timing for
submission, bid specs, fact sheet HOA, Gov Docs, Loss runs.
RFP - ANSWER- primarily for large projects, bid specs, inform on association, work
conditions, surveys/outline job, dates, warranty reqs
BBB - ANSWER- Better Business Bureau
, RFP Contract provisions - ANSWER- -parties involved
-scope of work
-compensation, time period
-warranty, indemnification, insurance
-permits/license
-default financial protection.
Loss Run - ANSWER- History of claims on insurance policy
Insurance proposal: Binding - ANSWER- carrier gives agent authority to commit to
insuring once association accepts.
Insurance proposal: Firm - ANSWER- numbers wont change unless specifications
change
Insurance proposal: Conditional - ANSWER- all must be declared first
Insurance Premium Calculation: Property - ANSWER- Value of building x Rate
Insurance Premium Calculation: Commercial Gen Liability - ANSWER- # of units x rate
+ features
Insurance Premium Calculation: Workers Comp - ANSWER- Payroll x rate (not fixed)
Property Coverage - ANSWER- fidelity, environmental, flood, vehicle
Liability Coverage - ANSWER- general, D&O, umbrella, (vehicle non-owned)
Personnel Coverage - ANSWER- Worker comp, employment liability
Fidelity - ANSWER- to protect the association and property owners from financial fraud
committed by the individuals who handle money for the association.
Net Income Coverage - ANSWER- Money
Workers Comp - ANSWER- protects volunteers, board, association (even if *workers*
not present)
Blanket Coverage - ANSWER- Includes all oversights of other coverages
Parts of Insurance Policy - ANSWER- conditions, declarations, exclusions, agreement,
definition, endorsement.
Lien - ANSWER- Legal claim by association/one party on the property of
another/homeowner to obtain debt or obligation
