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Car insurance NCD: what is a ‘No Claims Discount’?

Being a safe driver has its perks. Beyond keeping you out of harm’s way and shielding you from costly repair fees, driving without incident can also entitle you to a No Claims Discount (NCD) on your motor coverage. A car insurance NCD is commonplace the world over and can end up saving you a significant amount each year. What is an NCD, how does it work, and how much can you save? Read more about it with Kwiksure Singapore.

What is a No Claims Discount?

If you hold a motor policy, then you’ll likely have access to a car insurance NCD. Driving without needing to make a claim for a year or more will see you save on a percentage of your annual premium – and it increases the longer you go without incident! No Claims Discounts are an insurers way of rewarding you for being a careful driver. When it comes to how much you can save, it depends on the type of policy you hold:

  • Private car insurance: NCD will start at 10% for your first year and increase 10% for each year following (e.g. 20% for two years, 30% for three years). This is up to a maximum of 50% after your fifth year without a claim.
  • Commercial/motorcycle insurance: NCD starts at 10% for your first year, increases to 15% after the second, and maxes out at 20% at three years and beyond.

The important thing to understand is that the discount refers to making no claims. It’s entirely possible that you can sustain minor damage that you can arrange repairs for yourself so as to keep your car insurance NCD intact. Contact your broker or insurance company in such circumstances, or refer to your policy documents to know for sure.

What else should I know about my car insurance NCD?

As things aren’t always black and white, here are some interesting points to know about a No Claims Discount system in Singapore:

NCDs are transferable

If you drive carefully for three years and work up a 30% NCD with your current insurer, switching insurers doesn’t necessarily mean you’ll lose that bonus. Most insurers will allow customers to bring their No Claims Discount with them as an added incentive to buy their products. Check with your prospective insurer or broker to find out if you can transfer your premium reduction.

Transferring NCDs from other entities’ policies

There are two reasons you might be a driver without having the No Claims Discount attributed to yourself; either you’re a ‘named driver’ under someone else’s policy or you’re driving exclusively behind the wheel of a company-owned car. Unfortunately, being a named driver doesn’t qualify when you for an NCD seek out a Singapore car insurance policy of your own, but some insurers may allow you to take your clean driving record as a company driver to a personal policy.

Some claims won’t affect your No Claims Discount

Insurers in Singapore determine liability in an accident using the Barometer of Liability Agreement (BOLA). This benchmark is a guide that helps companies lessen the impact of a claim on your car insurance NCD if the percentage of liability is low enough. A liability of 20% or less should leave your NCD intact, however other moderate claims may reduce your premium discount by up to 30% at your next renewal.

Some insurers offer NCD protection

Generally, those at a 50% NCD can look into the option of paying an additional rider through their insurance company. This allows for one significant accident to be claimed upon without it affecting your No Claims Discount.

NCDs cannot be transferred between vehicle types

If you decide to trade in your private car for a motorcycle, your No Claims Discount will begin again at 0%.

No Claims Discounts can expire

Where drivers sell their vehicle and don’t purchase a new one within 12 or 24 months, the car insurer can then void the NCD you’ve earned over the years. The length of time a break in ownership can last for will vary from insurer to insurer.

Settling claims privately

The Motor Claims Framework in Singapore outlines that all accidents must be reported to your insurer, regardless of whether or not you need to make a claim against your policy. Failing to report an accident within 24 hours can be grounds for your insurer to reduce your No Claims Discount at the renewal of your policy.

Knowing when to make a claim with a car insurance NCD

Any time you have an accident, you have the option of not claiming the costs against your car insurance. When you have a high NCD, this might be a better idea. Smart drivers will work out the difference between making a claim and losing their No Claims Discount to ensure they’re not invalidating a significant premium reduction for a repair of an insignificant cost. When you’re unsure about what the best option might be, contact your insurance provider or motor policy broker.

Finding car insurance in Singapore that rewards your careful driving

Car insurance NCD is a common feature of virtually all motor policy providers. The finer details of how they work will vary from company to company which can make determining your best option for car insurance more challenging. The best way to overcome this is to engage the services of a reputable car insurance broker. Kwiksure Singapore is a company with a reputation for simplifying insurance.

Our experienced motor insurance policy consultants are drivers too – and they value their No Claims Discounts as much as you would. When it comes to securing the right type of car insurance for your needs, contact the expert team at Kwiksure Singapore today.