<No-Claim Discount (NCD)
 

What is a No-Claim Discount (NCD)?
If you have not made a claim for a year or more, you are entitled to a No-Claim Discount (NCD). The NCD reduces the premium for the following year. This is your insurer's way of recognising you for having been a careful driver. The following table shows how the NCD is set by all insurers across the industry.
 
Private car policies Commercial vehicle and motorcycle policies
Period of insurance with no claim Discount on renewal Period of insurance with no claim Discount on renewal
1 year 10% 1 year 10%
2 years 20% 2 years 15%
3 years 30% 3 years or longer 20%
4 years 40%
5 years or longer 50%

If I make a claim, will I automatically lose my NCD?
Not necessarily.

All insurers in Singapore use a guide called the Barometer of Liability Agreement (BOLA) to determine how much each party is liable in an accident.

The BOLA is designed to speed up claims processing. It does not diminish your right to contest liability under the law.

Under the BOLA, your NCD will not be affected if your liability is 20% or less in an accident involving an identified vehicle. In all other cases, your NCD may be affected.

Does my NCD apply to me, or to my vehicle?
In principle, your NCD applies to you and not to your vehicle. For example, if you sell your vehicle and buy another one, you will retain your NCD. However, if you own more than one vehicle, you might have a different NCD for each vehicle. You should check the details with your insurer, but generally:

Your NCD can:
Be transferred to another vehicle you own, but it cannot be applied to more than one vehicle at any point in time. For example, if you have accumulated a 30% NCD while using one vehicle, it does not follow that the same NCD applies to any other vehicle that you own or decide to buy. In other words, you will have to earn the NCD for each vehicle separately.

Your NCD cannot:
Be transferred to another person.

Can I insure against the loss of my NCD?

If you have accumulated a 50% NCD (five years or longer without a claim), some insurers may allow you to buy protection against the loss of the discount.

By paying a small amount of extra premium, you can make one claim during the year, and still have the discount fully protected. The 50% NCD is protected as follows:
 
 
Claims during the period of insurance NCD on renewal
1 50%
2 20%
3 or more NIL
 

Please check with your insurer whether NCD protection cover is available.

Will I lose my NCD if there is a break in ownership of my vehicle?

Most insurers in Singapore will allow you to keep your NCD should there be a break in ownership for up to 24 months. Some insurers set the timeframe at 12 months. You should contact your insurer for details.

Do I get a refund if I cancel my policy?
The common practice is that both you and your insurer can cancel your policy for any reason by giving seven days of written notice to the other party.

If your insurer cancels the policy, it will refund you the unused proportion of the premium.

Some insurers refund the premium on a pro-rata basis with the deduction of a small administration fee. Others use a method that calculates what would have been charged if your policy were a short-term policy. This usually applies if the cancellation is at your request. Please check with your insurer how this is calculated.

Note that refunds might be subject to a minimum amount, and that your insurer might reserve the right not to refund any premium if a claim has been made on the policy.

Always check carefully and understand what is covered before you take up a policy.
 

 

Source: General Insurance Association

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