You've no doubt heard the term 'No Claims Discount' repeated to no end on the advertisements played on the radio by now. But are you sure you know all that there is to know about what this No Claims Discount (NCD) is?
If you're not sure just what all the fuss is about, here's all the things a typical motorist will need to know!
Just what is a No Claims Discount?
An NCD is exactly as what its name suggests - if no claim has been made under your car insurance policy, you'll get a discount on the premium you'll have to pay to insure your car the following year.
No Claims Discounts are offered to encourage careful driving and to reward careful drivers, by ensuring that those who put in the additional effort to avoid any accidents on the road do not have to fork out as much money to insure their vehicle.
Why should I worry about the NCD and what can I do about it?
So, just why everyone is so concerned about the NCD should be evident by now - it affects how much you'll have to pay to keep your vehicle insured.
A typical car insurance policy here in Singapore will offer an additional 10% NCD with every year you are insured without any claims made. And this discount is normally capped at 50%, so there's a sizeable chunk of money that you can save with some careful driving!
But of course, there's no guarantee that your journeys will always stay accident free. For those who want an extra bit of assurance, look for an insurer that also offers an NCD protector for your vehicle insurance.
Opting for this NCD protector will mean that you must pay a little extra for your insurance premium but will mean that you get to retain whatever NCD you already have accumulated after your first claim and have the option to have some of your NCD protected after your second claim.
You can refer to this table with some examples of how an NCD protector will work to see if it might be just what you need:
| Claims made during the period of insurance | Protected NCD Entitlement upon renewal with same insurer |
| One | 50% |
| Two | 20% |
| Three | Nil |
How is my NCD calculated?
Figuring out your NCD is easy - it accumulates by an additional 10% for every year that no claims have been made against your insurance plan (or if you are found wholly not at fault in an accident involving another vehicle). So, if you've been insured for the past two years without any incident, your NCD should stand at 20% as you move into your third year.
If, however, a claim has been made against your policy, then this NCD will be reduced. A table showing just how your NCD can be reduced is replicated here:
| Current NCD | NCD after one claim |
| 50% | 20% |
| 40% | 10% |
| 30% and under | 0% |
Do also note that your NCD will be reduced to 0% if two (or more) claims are made under your policy within a year, and that failure to report an accident leading to a claim in your policy within 24 hours of the accident or the next working day will see your NCD being reduced by an additional 10%.
How do I check my NCD?
Not too sure just what NCD you've accumulated? It should be clearly stated within your policy schedule and/or certificate of insurance!
Can't find your ideal car insurance policy? Why not let us find you one instead? With over 15 car insurance plans across major insurers in Singapore on one single platform, you're sure to get just what you need from an insurance policy here!
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