RIBO INSURANCE EXAM QUESTIONS &
CORRECT ANSWERS | LATEST 2026/2027
UPDATE (GUARANTEED PASS) GRADED A+.
What is spread of risk and how can it be done? - CORRECT ANSWER
>>>Spreading of risk is a way to achieve balance between premiums
collected versus losses paid. It is done through volume (large number of
risks), diversity of risk (different risk classifications) and diversity of
location (not all risks in one location).
What does the insurance money get used for? - CORRECT ANSWER
>>>Insurance money is a source of capital. it is invested in large
amounts of capital to low risk investments.
What is insurable interest? - CORRECT ANSWER >>>You must
own the item that you are insuring. You must benefit from its existence
and suffer from its loss. You cannot insure your neighbour's house.
What is actual cost value (ACV)? - CORRECT ANSWER
>>>determined in one of three ways: cost to repair, fair market
value or consideration of evidence of value
1|Page
,What are the two most popular forms of valuation in indemnification? -
CORRECT ANSWER >>>Actual cash value (ACV) and replacement
value (cost)
What is value contracts? - CORRECT ANSWER >>>It is an
alternative calculation method where a predetermined amount is agreed
upon by the insure and insured at the time the contract is made. It is
usually done on items where it is difficult to determine a true value after
loss.
What are the four groups of insurers? - CORRECT ANSWER >>>1)
For profit - stock companies
2) Co-operative - mutuals & reciprocals
3) Government - worker's compensation
4) Captive - policy holders limited to parent company and subsidiaries
What makes pure risk insurable while speculative not? - CORRECT
ANSWER >>>Pure risk insurance is a situation involving a chance of
a loss without a chance of gain. Insurance will accept situations where
there is no potential for gain.
2|Page
,Insurance - CORRECT ANSWER >>>A contract in which one party,
the insurer, for monetary consideration agrees to reimburse another, the
insured, for loss or liability for a loss by specified hazards or perils
What is General Insurance? - CORRECT ANSWER >>>General
insurance includes property and casualty insurance. It is also referred to
as P&C insurance. Property is the loss or loss of income caused by a
covered peril. Causality refers to areas not covered by fire, life or auto
which would be burglary or liability.
What is replacement value? What is guaranteed replacement cost? -
CORRECT ANSWER >>>Replacement value is the current market
value to replace. Guaranteed replacement pays for replacement cost
without depreciation and can exceed the amount of insurance on the
dwelling.
Risk - CORRECT ANSWER >>>the chance of loss (the possible loss
or destruction of property or incurring of a liability).
3|Page
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CORRECT ANSWERS | LATEST 2026/2027
UPDATE (GUARANTEED PASS) GRADED A+.
What is spread of risk and how can it be done? - CORRECT ANSWER
>>>Spreading of risk is a way to achieve balance between premiums
collected versus losses paid. It is done through volume (large number of
risks), diversity of risk (different risk classifications) and diversity of
location (not all risks in one location).
What does the insurance money get used for? - CORRECT ANSWER
>>>Insurance money is a source of capital. it is invested in large
amounts of capital to low risk investments.
What is insurable interest? - CORRECT ANSWER >>>You must
own the item that you are insuring. You must benefit from its existence
and suffer from its loss. You cannot insure your neighbour's house.
What is actual cost value (ACV)? - CORRECT ANSWER
>>>determined in one of three ways: cost to repair, fair market
value or consideration of evidence of value
1|Page
,What are the two most popular forms of valuation in indemnification? -
CORRECT ANSWER >>>Actual cash value (ACV) and replacement
value (cost)
What is value contracts? - CORRECT ANSWER >>>It is an
alternative calculation method where a predetermined amount is agreed
upon by the insure and insured at the time the contract is made. It is
usually done on items where it is difficult to determine a true value after
loss.
What are the four groups of insurers? - CORRECT ANSWER >>>1)
For profit - stock companies
2) Co-operative - mutuals & reciprocals
3) Government - worker's compensation
4) Captive - policy holders limited to parent company and subsidiaries
What makes pure risk insurable while speculative not? - CORRECT
ANSWER >>>Pure risk insurance is a situation involving a chance of
a loss without a chance of gain. Insurance will accept situations where
there is no potential for gain.
2|Page
,Insurance - CORRECT ANSWER >>>A contract in which one party,
the insurer, for monetary consideration agrees to reimburse another, the
insured, for loss or liability for a loss by specified hazards or perils
What is General Insurance? - CORRECT ANSWER >>>General
insurance includes property and casualty insurance. It is also referred to
as P&C insurance. Property is the loss or loss of income caused by a
covered peril. Causality refers to areas not covered by fire, life or auto
which would be burglary or liability.
What is replacement value? What is guaranteed replacement cost? -
CORRECT ANSWER >>>Replacement value is the current market
value to replace. Guaranteed replacement pays for replacement cost
without depreciation and can exceed the amount of insurance on the
dwelling.
Risk - CORRECT ANSWER >>>the chance of loss (the possible loss
or destruction of property or incurring of a liability).
3|Page
, Thank you for Purchasing this exam
Study Guide. We provide high-quality
academic materials to help students
excel in exams. Our other Services
include but not limited to: academic
research, University & College
assignments writing, essay writing,
Online Classes, and research projects.
Our services are reliable, affordable,
and plagiarism-free. All the Best in
your Exam. For more information;
Contact us at:
or
0R +254
741484450
4|Page
