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CMCA Exam Study Guide.
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
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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
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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.
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