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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% |
|
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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 |
|
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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.
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