Fire Sprinkler Systems and External Fire Loss Exposures: Practice Questions and Solutions

This section of the study guide is intended to provide practice problems and solutions to accompany the pages of Insurance Operations, Regulation, and Statutory Accounting, cited below. Students are encouraged to read these pages before attempting the problems. This study guide is entirely an independent effort by Mr. Stolyarov and is not affiliated with any organization(s) to whose textbooks it refers, nor does it represent such organization(s).

Some of the questions here ask for short written answers based on the reading. This is meant to give the student practice in answering questions of the format that will appear on Exam 5. Students are encouraged to type their own answers first and then to compare these answers with the solutions given here. Please note that the solutions provided here are not necessarily the only possible ones.

Source:

Myhr, A.E.; and Markham, J.J. Insurance Operations, Regulation, and Statutory Accounting (Second Edition). American Institute for Chartered Property Casualty Underwriters. 2004. Chapter 5, pp. 5.20-5.24.

Original Problems and Solutions from The Actuary's Free Study Guide

Problem S5-55-1. Myhr and Markham, p. 5.21, discuss various sprinkler systems. Give a definition of each of the following sprinkler systems:

(a) Automatic sprinkler systems;
(b) Wet pipe sprinkler systems;
(c) Dry pipe sprinkler systems;
(d) Pre-action sprinkler systems;
(e) Deluge sprinkler systems.

Solution S5-55-1. The following definitions are provided by Myhr and Markham, p. 5.21:

(a) Automatic sprinkler systems are "Fire sprinkler systems with a series of interconnected valves and pipes with sprinkler heads. Each sprinkler head usually contains a heat-sensing element that responds individually to the heat generated by a fire."
(b) Wet pipe sprinkler systems are "Automatic fire sprinkler systems with pipes that always contain water under pressure, which is released immediately when a sprinkler head opens."
(c) Dry pipe sprinkler systems are "Automatic fire sprinkler systems with pipes that contain compressed air or another inert gas that holds a valve in the water line shut until an open sprinkler head releases the gas and allows water to flow through the previously dry pipe to the sprinkler head."
(d) Pre-action sprinkler systems are "Automatic fire sprinkler systems with automatic valves controlled by smoke or heat detectors."
(e) Deluge sprinkler systems are "Automatic fire sprinkler systems with valves that remain open and that are controlled by an automatic fire detection device, such as a smoke or heat detector."

Problem S5-55-2. Name four factors that influence the severity of an exposure fire in an exposing building. (An exposing building is "one that significantly increases the possibility o fire in the insured building". An exposure fire is a "fire that erupts in an exposing building". These definitions and a discussion of the factors influencing exposure fires can be found in Myhr and Markham, pp. 5.22-5.23.)

Solution S5-55-2. The following twelve factors are mentioned by Myhr and Markham, pp. 5.22-5.23:

1. The intensity of the exposure fire;
2. The duration of the intensity fire;
3. "Type of construction of the exposing (adjacent) and exposed (insured) buildings";
4. "Height and width of the exposure fire";
5. "Openings in the exterior walls of the exposing and exposed buildings";
6. "Type of combustible contents in the exposure fire";
7. "Protection for openings in the walls of the exposed building";
8. "Interior finish of the exposing and exposed buildings";
9. "Distance between the exposing and exposed building";
10. "Shielding effects of noncombustible construction between the exposing and exposed buildings";
11. "Wind direction and velocity at the time of the fire";
12. "Public and private fire protection".

Any four of the above answers will suffice. Other valid answers may be possible.

Problem S5-55-3. Name four ways in which the probability that an external fire will spread to an insured property can be reduced. If necessary, refer to Myhr and Markham, p. 5.23.

Solution S5-55-3. This question is based on the discussion in Myhr and Markham, p. 5.23, where the following preventative measures/characteristics are mentioned:
1. Fire walls;
2. Fire doors;
3. Special barriers;
4. Parapets;
5. Clear space between buildings;
6. Good water supply;
7. Quick response from the fire department;
8. Internal automatic sprinkler systems;
9. External automatic sprinkler systems;

Any four of the above answers will suffice. Other valid answers may be possible.

Problem S5-55-4. Name six specific ways in which the loss exposure between two buildings can be reduced. If necessary, refer to Myhr and Markham, p. 5.23.

Solution S5-55-4. This question is based on the discussion in Myhr and Markham, p. 5.23, where the following preventative measures/characteristics are specifically mentioned:

1. "Complete automatic sprinkler system protection";
2. "Blank walls of noncombustible materials facing the exposure";
3. "Barrier walls (self-supporting) between the insured building and the exposure";
4. "Extension of exterior masonry walls to form parapets or fender walls";
5. "Automatic outside water curtains for combustible walls";
6. "Elimination of openings by filling them with construction equivalent to the wall";
7. "Glass block panels in openings";
8. "Wired glass in steel-sash windows (fixed or automatic closing) in openings";
9. "Automatic or deluge sprinklers outside over openings";
10. "Automatic (rolling steel) fire shutters on openings";
11. "Automatic fire doors on door openings";
12. "Automatic fire dampers on wall openings".

Any six of the above answers will suffice. Other valid answers may be possible.

Problem S5-55-5. Based on the discussion of multiple-occupancy loss exposures in Myhr and Markham, p. 5.24, answer the following questions:

(a) What is a multiple-occupancy loss exposure?
(b) What fundamental aspect of multiple-occupancy loss exposures would require them to be treated differently from single-occupancy loss exposures?
(c) What are two major considerations that underwriters take into account when evaluating multiple-occupancy buildings?

Solution S5-55-5.

(a) A multiple-occupancy loss exposure arises from a building where "persons other than the policyholder own or control portions of the fire division that contains the insured property" (Myhr and Markham, p. 5.24).

(b) With a multiple-occupancy loss exposure, the occupancy hazards of persons and businesses other than the policyholder, who occupy the same building, can result in an increased risk for the policyholder and correspondingly greater insurance risk. For instance, if the insured property is separated from other occupancies by a combustible wall, it is possible for a fire from a non-insured property to spread to the insured property (Myhr and Markham, p. 5.24).

(c) When evaluating multiple-occupancy buildings, underwriters consider 1) "the occupancy class of the other occupants" and 2) "the amount of protection available against fire originating in exposing occupancies" - such as whether there is a noncombustible wall, or whether there is vulnerability due to fire because of the presence of a continuous attic for the whole fire division or of fire-prone drywall partitions (Myhr and Markham, p. 5.24).

See other sections of The Actuary's Free Study Guide for Exam 5.