CCS Condominium Insurance & Risk Management Flashcards
6 cards from real CCS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CCS Condominium Insurance & Risk Management flashcards as text
When a condominium unit owner makes improvements above the original builder's grade, which policy should cover those upgrades if a loss occurs?
Answer: The unit owner's HO-6 improvements and betterments coverage
Upgrades beyond the builder's standard (betterments) are the unit owner's responsibility and should be covered under the improvements and betterments provision of an HO-6 policy.
What is the primary purpose of an annual insurance review for a condominium association?
Answer: To ensure coverage limits remain adequate as construction costs and property values change
Annual reviews verify that insured values, deductibles, and coverages keep pace with rising construction costs and any new exposures, preventing the association from being underinsured.
Umbrella liability insurance for a condominium association provides coverage that:
Answer: Kicks in once underlying liability policy limits are exhausted
An umbrella policy provides excess liability coverage above the limits of underlying policies such as CGL and D&O, protecting the association from catastrophic liability claims.
Which type of insurance is specifically designed to cover equipment breakdowns such as HVAC systems and elevators in a condominium building?
Answer: Equipment breakdown (boiler and machinery) insurance
Equipment breakdown insurance (formerly called boiler and machinery) covers losses from the sudden and accidental breakdown of mechanical, electrical, and pressure equipment.
A condominium association's business income (loss of assessment income) coverage is intended to:
Answer: Compensate the association for lost assessment revenue when units are uninhabitable after a covered loss
Business income coverage reimburses the association for lost assessment income during the period owners cannot occupy their units due to a covered property loss.
Under the CCS framework, who is primarily responsible for ensuring a condominium association maintains adequate insurance coverage?
Answer: The association's board of directors
The board of directors has a fiduciary duty to maintain proper insurance coverage for the association, typically guided by the governing documents and applicable state law.