Getting to Know NCD (No Claim Discount)
ArticleApril 28, 2023
- What is NCD? NCD stands for No Claim Discount, which is a discount on your motor insurance premium if you did not make a claim in the previous year of your policy.In other words, being a good and cautious driver is like being that straight-A+ student in class. However, instead of being rewarded with good grades and academic trophies, you’re being rewarded with premium discount. Now, isn’t that great?
- Who decides on the NCD rates?
- How do I check my current NCD rate?
- How does NCD benefit me?
- Can I still retain my NCD after I made a claim?
- Can I transfer my NCD?
The NCD rate is set by Persatuan Am Insurans Malaysia (PIAM). The rates for private cars & motorcycles are listed below:
| Claim Free Year of Insurance | NCD Entitlement for Private Cars |
|
After 1 continuous claim free year |
25% |
| After 2 continuous claim free years | 30% |
| After 3 continuous claim free years | 38 1/3% |
| After 4 continuous claim free years | 45% |
| After 5 continuous claim free years and beyond | 55% |
| Claim Free Year of Insurance | NCD Entitlement for Motorcycles |
|
After 1 continuous claim free year |
15% |
| After 2 continuous claim free years | 20% |
| After 3 continuous claim free years | 25% |
Simple! You can check your current NCD rate via the Central NCD Database (“CND”) at www.mycarinfo.com.my/ncdcheck/online or just reach out to us.
NCD helps lower your motor insurance premium so you get to save more. You will earn NCD if you did not make a claim during the previous policy year. Here are some scenarios to help you understand better:
Scenario 1:
Ali is a cautious driver and he has not made any claims in all his insurance policy years.
| Policy Year | NCD applied at the start of Policy | Premium Amount* (before NCD is applied) | Premium Amount (after NCD is applied) | NCD Savings |
|
2017 |
0% | RM1,000 | RM1,000 | N/A |
| 2018 | 25% | RM1,000 | RM750.00 | RM250.00 |
| 2019 | 30% | RM1,000 | RM700.00 | RM300.00 |
| 2020 | 38 1/3% | RM1,000 | RM616.70 | RM383.30 |
| 2021 | 45% | RM1,000 | RM550.00 | RM450.00 |
| 2022 | 55% | RM1,000 | RM450.00 | RM550.00 |
| 2023 | 55% | RM1,000 | RM450.00 | RM550.00 |
Scenario 2:
Ali had an unfortunate accident and submitted a claim in 2019. Due to the claim submitted, Ali’s NCD of 30% resets to 0% upon his next policy renewal.
| Policy Year | NCD applied at the start of Policy | Premium Amount* (before NCD is applied) | Premium Amount (after NCD is applied) | NCD Savings |
|
2017 |
0% | RM1,000 | RM1,000 | N/A |
| 2018 | 25% | RM1,000 | RM750.00 | RM250.00 |
| 2019 | 30% | RM1,000 | RM700.00 | RM300.00 |
| 2020 | 0% | RM1,000 | RM1000.00 | N/A |
| 2021 | 25% | RM1,000 | RM750.00 | RM250.00 |
| 2022 | 30% | RM1,000 | RM700.00 | RM300.00 |
| 2023 | 38 1/3% | RM1,000 | RM616.70 | RM383.30 |
*For illustration purpose, Premium Amount (before NCD is applied) is assumed to remain the same at RM 1,000 annually.
There are two scenarios which will allow you to retain your NCD:
(a) The accident is clearly not your fault - this must be proven via a police report.
(b) If you have certain add-ons (e.g. windscreen add-on) in your policy, you can make a claim under these add-ons without affecting your NCD.
You earn NCD for each vehicle you own. So, your NCD is unique to you and it is not transferable to another person if you sell your vehicle. However, your NCD is transferable between vehicles owned by you.
Now that your questions on NCD are answered, remember: Keep practicing safe driving behaviour and reap the rewards of NCD!
#DriveSafeToSave