We believe that majority of Singapore drivers are familiar with the term, No Claim Discount (NCD). But for the sake of those who just started driving or who are not familiar with the term, let’s start of by answering the question “What is No Claim Discount (NCD)?”.
What is No Claim Discount (NCD)?
The No Claim Discount (NCD) is a form of “reward” given to drivers who have been driving safely and have no claim being made under his/her policy. It is calculated yearly and the benefit of accumulating NCD is that you will enjoy lower car insurance renewal for the following year.
NCD is accumulated differently for passenger cars/private cars and commercial vehicles. To make it easier to understand, the table below illustrates how you can earn NCD and how much discount can you accumulate and earn year after year.
Passenger Cars/Private Vehicles
| Years Without Any Claims | Accumulated No Claim Discount (NCD) |
| 1 Year | 10% |
| 2 Years | 20% |
| 3 Years | 30% |
| 4 Years | 40% |
| 5 Years and above | 50% |
Commercial Vehicles
| Years Without Any Claims | Accumulated No Claim Discount (NCD) |
| 1 Year | 10% |
| 2 Years | 15% |
| 3 Years and above | 20% |
Although NCD is one of the factors affecting the premium, it is not the only one. If you wish, you may also want to read up on the 18 factors that we have compiled that will affect how car insurance premium is calculated in our blog.
Can I keep my NCD for life?
The answer is Yes and No. It depends on your driving pattern. The answer is Yes if you have always been a safe driver and stay as one, your NCD will keep increasing until you reached the maximum NCD of 50% of private cars and 20% for commercial vehicles.
But if you do not practice safe driving and get into an accident, you will lose a huge part or all of your NCD depending on how much you have accumulated. You will see how your NCD is deducted if a claim is made under your policy at the next point.
What if I make a claim, will my NCD be lost?
Well, your NCD will definitely be affected if a claim is made to your policy. The reductions of your NCD is as per below table:
Passenger Cars/Private Vehicles
| Existing NCD | Deduction for 1 claim | Remaining NCD |
| 50% | 30% | 20% |
| 40% | 30% | 10% |
| 30% and below | 30% or ALL | 0% |
Commercial Vehicles
| Existing NCD | Deduction for 1 claim | Remaining NCD |
| 20% | ALL | 0% |
| 15% | ALL | 0% |
| 10% | ALL | 0% |
As the above table shows, each claim made to your policy will make you lose 30% of your NCD. So, if there are 2 claims made to your policy in a year, then your NCD will be reduced to 0 even if you have 50% NCD. The good news is, there is no negative NCD. However, this is just a general guideline according to the General Insurance Association. You are welcome to check with your insurer again if you wish.
Another good news is that your NCD may not be affected if you are found not at any fault in the accident. But, please make sure you did your accident reporting within 24 hours of the accident as some insurers may drop your NCD if you fail to do so.
Is there any way to protect my NCD?
Yes, there is! Many insurers have a protection plan for your NCD. They call it the “NCD Protector”. Some insurers may include the NCD Protector in their quotation at no cost but some does not. For those who does not, you may still get from them a NCD Protector by paying for a little extra to protect your hard earned NCD in case of an accident.
Most but not all insurers have a NCD protector plan but each of them have different criteria. Many of them only offer it to people with 50% NCD. If you are interested in the NCD protector plan, do check with your insurer for the eligibility of if you are getting quotes from any one, they will normally state if the NCD Protector is included because it is an additional selling point.
How does NCD Protector works?
To put it in the simplest terms, the NCD Protector protects your NCD so that it will NOT be reduced even you get into an accident. However, the protection is normally for ONE accident only. After the first claim, everything is back to normal and reduction will apply according to the third point of this article. See example below:
Assuming you now have 50% NCD and you gotten a NCD protector. During the year, you make a claim to your policy (Touchwood). And because you have a NCD protector, your NCD will still remain at 50% even after the claim. But if you make second claim in the same year, your NCD will drop from 50% to 20%. So it only covers your NCD from the first claim. After a claim is made, the protector is as good as zero for the remaining duration until your next renewal. Got to drive safer if you want to keep your hard earned NCD.
Can I transfer my NCD to another vehicle?
The NCD actually follows you and not your car so Yes, it is possible to transfer your NCD over to the new car you bought. All you have to do is to let the dealer or insurance broker knows about your existing insurer and NCD and he or she can settle the rest for you.
But if you have a few cars or wish to keep your old car while getting another one, you are unable to transfer your NCD to all the vehicles. You have to choose one main vehicle to transfer the existing NCD to and rebuild NCD for each of the additional vehicles you have.
Can I transfer my NCD to another person?
In principle, NCD can only be transferred to your spouse (husband or wife) and it must be within the current insurer. However, in our years of experience, we have also seen transfers of NCD to children and other closely related family members. Requests like this are normally difficult unless special reasons and is subjected to approval of the insurer. Also, not all insurers will entertain such appeals.
How long can I keep my NCD after I stop driving?
Some people may be posted overseas or some may want to stop driving for a while. The most common question is how long can one keep their NCD if they want to take a break from driving? So here’s the answer.
Again, every insurer is different. Most gives a 12 months allowance but some gives up to 24 months. The best way is to call your current insurer to check with them. Alternatively, you can also use 12 months as a guideline.
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With this, we think we have more or less covered most of the commonly asked questions about no claims discount (NCD) and we hope that this quick guide has helped answered some of your questions.
We are constantly improving to add more value to our clients and visitors, so please let us know if you can think of any other questions that we should include in this quick guide to benefit other readers by using our contact form.
If you wish to receive competitive quotes for your next renewal, feel free to use our car insurance renewal quotation form to submit your details and we will be in touch with you about 1 month before your renewal is due.
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