How Does No-Claim Discount (NCD) Work?

What is No-Claim Discount (NCD)?

A No-Claim Discount (NCD) is a cost reduction for your car insurance premium if no claims were made under your policy for a year or more with your current insurer. This cost reduction essentially recognises and rewards careful drivers. 

It also acts as an incentive for you to continue driving carefully because you could lose some or all of it if you get into an accident. With each year that you do not make a claim, you get an increasing discount: 

What happens to my NCD if I make a claim?

If a claim was made under your policy, your NCD will be reduced as follows:

Do note that if you make more than one claim in a year, your NCD will be reduced to 0%. 

If you were involved in an accident with another vehicle, and it was found that you were not at fault or your liability was 20% or less, your NCD may remain unaffected. Otherwise, the NCD may be impacted.

Can I transfer my NCD between cars?

For owners of multiple vehicles, each vehicle you own might have a different NCD value. Having a 30% NCD for one vehicle doesn't automatically give the same NCD to other vehicles you own or plan to buy. In other words, you must earn the NCD for each vehicle individually.

You can transfer the NCD from one vehicle to another, but it cannot be applied to more than one vehicle simultaneously. If you choose to transfer your NCD to another vehicle, you will have to do a top-up on the insurance premium for the vehicle you removed the NCD from, or ensure that the previous insurance policy has already been cancelled. 

Generally, your NCD cannot be transferred to another person. However, in the case of transferring NCD between spouses, it is possible with an appeal and approval from the insurer. 

I last owned a car with NCD a year ago. Is the NCD still valid?

In Singapore, insurers allow you to retain your NCD even if there's a break in vehicle ownership, typically for up to 12 months. Some insurers may extend this period to 24 months.

Can I buy protection for my NCD?

You can purchase NCD protection from insurers if your NCD is between 30% and 50%. The cost is typically around 10-15% of your motor insurance premium.

By paying this premium, your NCD is fully protected, and does not decrease even if you make one claim during the period of insurance. However, unlike regular NCD, the protected NCD cannot be transferred to another insurer. 

Having an NCD Protector also will not protect you against non-renewal, cancellation, or increase in base premium of your policy by your insurer. In our opinion, NCD Protector does not actually offer any protection. This is especially so if you’ve had an at-fault accident. The "NCD protected" renewal premium might cost more than another insurer offering a lower NCD. As such, it is always best to consult with your insurance broker when you are considering renewal. 

Get insured with the right help.

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