What is the premium payable for the comprehensive cover?

Eke bought a new car for N1.5M. The practice in the insurance industry is to pay 10% of the value of the vehicle as premium for comprehensive cover and 2.5% additional cover for strike, riot and civil commotion. Eke was issued a document and two weeks later, he was issued another document different from the first document issued

A. N37,000
B. N150,000
C. N155,000
D. N187,500

Correct Answer: Option D

D. N187,500

Explanation

comprehensive cover = 10% + 2.5% of N1.5M

150,000 + 37,500 = 187500

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