Risk Assessment & Mitigation Flashcards
7 cards from real CRU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Risk Assessment & Mitigation flashcards as text
A residential property is located in a Flood Zone AE on a FIRM map. What does this designation indicate?
Answer: High-risk area with a base flood elevation established by FEMA
Flood Zone AE is a Special Flood Hazard Area where FEMA has established a specific base flood elevation (BFE), indicating a 1% annual chance of flooding.
When evaluating a property with an in-ground swimming pool, which risk factor is MOST relevant to the underwriter?
Answer: Attractive nuisance liability exposure
An in-ground pool creates an attractive nuisance liability exposure, meaning the homeowner may be liable if uninvited children are injured while trespassing.
Which of the following best describes a 'moral hazard' in residential underwriting?
Answer: The insured's tendency to behave recklessly because insurance exists
Moral hazard refers to the increased risk of loss that arises from an insured's change in behavior due to the presence of insurance coverage.
A home built in 1965 has original knob-and-tube wiring still in use. How should an underwriter treat this condition?
Answer: Require replacement or impose an exclusion for fire losses
Knob-and-tube wiring presents a significant fire hazard and underwriters typically require replacement or apply a specific exclusion to manage this elevated risk.
What is the primary purpose of requiring a four-point inspection for older residential properties?
Answer: To assess the condition of roof, HVAC, plumbing, and electrical systems
A four-point inspection evaluates the four major systems—roof, HVAC, plumbing, and electrical—that are most likely to cause significant losses in older homes.
A residential underwriter notices a property has been vacant for eight months. Which concern is MOST significant?
Answer: Increased exposure to vandalism, theft, and undetected damage
Vacant properties face significantly elevated risks including vandalism, theft, water damage from undetected leaks, and squatters, all of which increase insurer exposure.
Which risk mitigation measure would MOST directly reduce a homeowner's wind loss exposure?
Answer: Applying hurricane straps to roof-to-wall connections
Hurricane straps (also called roof-to-wall connectors) directly reinforce the weakest point in wind resistance, reducing the risk of roof detachment during high winds.