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FAQs on NCD 

Q: What is NCD?

A: NCD (No Claims Discount - some call it No Claims Bonus or NCB) is a discount off the vehicle insurance premium you, as the owner of vehicle, get as an incentive for not making any claim in the previous year (s).

Q: How does NCD work in Singapore?

A: The first year you own your vehicle and buy vehicle insurance, your discount is 0%.

The second year, ie after having completed at least 12 continuous months of insurance, you renew your vehicle insurance, your discount is 10% - assuming you do not make any claim*.

* This includes a claim you make against your own policy (normally known as Own Damage Claim - if you have a Comprehensive policy), a claim others make against your policy (normally known as Third Party Claim) when it can be proven that you are at fault or partly at fault. It also includes claims for fire & theft, ie when the vehicle gets engulfed by fire totally or stolen, assuming you have bought a Comprehensive policy or a Third Party Fire & Theft policy. However, it excludes windscreen claims if you have additional windscreen coverage under your Comprehensive policy (normally it is called windscreen coverage include, unlimited windscreen coverage). This means that if you make a claim for your windscreen with this additional coverage, your no claims discount is NOT affected.

On the third year you renew your vehicle insurance, your discount is 20% - once again assuming you do not make any claim.

In this way, your NCD increases by 10% a year, up to a maximum of 50% NCD for private vehicles. In the case of commercial vehicles, the NCD goes from 0%, 10%, 15% and caps at 20% after each successive year of having no claims.

In this way, you get to save on your vehicle insurance premium if you maintain a "no claims" record. Note that with a 50% NCD, you pay only half the premium (or lesser) compared to someone who does not have any NCD.

Q: All along, I have been driving my father's vehicle and have not made any claims.  Am I entitled to NCD?

A: NCD belongs the owner of the vehicle.  If you are only the named driver, you do NOT accumulate NCD.  However, in some cases, NCD can be transferred from one party to another, eg between spouses or from parent to child.  This is at the discretion of the insurers.  For details, please check with the relevant insurer, agent or broker.

Q: I have a 40% NCD but unfortunately I just made a claim. So what is my NCD upon renewal?

A: The moment you make a claim, your NCD will be reduced by 30%. So if the vehicle owner has NCD of 40% and he makes a claim during that policy year, his NCD will be reduced to 10% when he renews his insurance. Of course, if he does not make any claim, his NCD increases to 50% upon renewal. If his NCD is 50% and he makes a claim, his premium is reduced to 20%. If his NCD is 20% and he makes a claim, his NCD shall be reduced to 0% (it does NOT go to -10%!). So for every claim made during the policy year, the NCD is being reduced by 30%, with the lower limit being 0%. As long as it is due to a single incident / accident, it is considered one claim, ie if due to that incident / accident, the owner makes his own damage claim and the third party makes a claim against him, the insurance company considers it as ONE claim (not TWO), although the insurer pays to the owner as well as the third party. But if another incident / accident happens and results in further claim (s), then it is considered a 2nd claim. The NCD gets reduced AGAIN. Since the maximum NCD the owner can get is 50%, the NCD will be 0% upon renewal if 2 or more claims are made.

Q: Does my NCD get affected even if it is not my fault?

A: Strictly speaking, as long as your insurance company pays any claim, the NCD is being reduced. It is a NO "Claims" Bonus, and NOT a No "Blame" Bonus, so as to say. Although, in certain special circumstances, the insurance company, may, at its sole discretion, decide NOT to reduce the NCD even if it has paid a claim.