Page 149 - Motor Insurance Ebook IC 72

Guide for Motor Insurance

3. Bonus Clause: The policy provides for a No claim
discount for each claim free year, on the own damage
section of the premium of the policy. The discount starts
at 20% rising to 50% over 5 years.

The discount is available within a period of 90 days from
the expiry of the policy. The bonus earned more than
50% under the provisions of old tariff is protected under
Sunset Clause till there is no accident to the insured
vehicle.

Q9. Mention the procedure of calculating premium
under Motor Trade internal Risk Insurance.

Ans: For motor Trade internal Risks Insurance, rates of
premiums are based on:
a. Superficial area of premises, that is, land and
buildings occupied by the insured for the purpose of
motor trade business. Different are provided for
areas ranging from 200 sq m or part thereof in excess
of 2000 sq m.

b. Wages: A percentage premium on the wages paid
to employees subject to adjustment at expiry of the
policy. For this purpose, Condition no 6 of the policy
is relevant, briefly, it states:

The first and all renewable premium are to be regulated

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