In most cases, car owners sign up for a car insurance plan so that they can avoid taking out their hard earned money from their pockets in the event when something goes wrong. All they have to do is simply make a claim. However, there are benefits available for the car owners if they do not make any claims over a certain period of time - it's called the NCD.
What is NCD?
NCD stands for No-Claim Discount. This is a discount offered by car insurers for those car owners who have not made any claims within a year or more. The longer the car owners do not make any claims, the better the discount they may be eligible for.
The No-Claim Discount or NCD is meant to reduce the premium that car owners will have to pay the following year with regards to their car insurance plan. This way, the insurers will be able to recognize those car owners who have been pretty careful on the roads.
Below is the similar illustrates more about how the car insurers out there determine the NCD.
Private Car NCD Motorcycle NCD
First Year - 0% First Year - 0%
Second Year - 25% Second Year - 15%
Third Year - 30% Third Year - 20%
Forth Year - 38.33% Onward - 25%
Fifth Year - 45%
Onward - 55%
The NCD is tied to your name (I/C) and not a car. Thus, it is actually transferable. Meaning that if you off your car and get yourself a new car, your new car insurance can be applied with your entitled NCD. In the event that you are selling off your old car, remember to cancel that policy as any remaining period covered not used can be refund to you.
Although the name is called No-Claim Discount, it does not means you cannot claimed against your own insurance. In the event of an accident, which you are not at fault, you are entitled to claim your own insurance for repair and yet you do not lose your NCD. Your NCD will only be lost if you are involved in an accident and you are at fault, resulting in other parties claiming against you.
Once your insurance has been claimed, you lose your NCD entitlement and it is reverted to zero (0%0 - no discount.
But if you have not been involved in any accident, your NCD entitlement will increase over the years. The maximum NCD one can entitled to is 55%.
If you have renewed your insurance policy without taking into your NCD entitlement, inform your agent and they will help you to apply your NCD and have the excess payment refund to you.
How to check your NCD status? Click me
Frequent Case:
Most of the customers who involved in accidents previously, which they are not fault and claim on other parties, when they want to renew car insurance by using new company's insurance policy, but the previous company insurance hold the NCD and does not release it. Customer suppose to get NCD 55%, but due to the old company insurance hold it, so when they check with new company insurance, the NCD is 0%. This is because the old company insurance want the particular customer to renew insurance back with them. Did you see the trick?! Please do not blame the new company insurance's agent if they can't help you to release the NCD from previous company insurance. Therefore, we are encourage customers to call their previous policy insurance company to request for release the NCD.
Kindly refer the below example:
Miss Tina had an accident in earlier 2013, it is claim on other parties, and does not effect her NCD.
- Current NCD is 55%
- The time accident happened was using P insurance company.
In 2014, Miss Tina want to renew her car insurance, this time she choose F company's insurance.
Problem: Her NCD is become 0%
Solution:
a) Miss Tina make a call to P company to ask for release the NCD so that she can use F company's policy. (recommended)
b) F company's agent help to make a call to P company to ask for release Miss Tina's NCD immediately.
c) Renew with P company.
From the above case, normally P company will release the NCD immediately after customers make the call. Sometimes, P company doesn't want to release it by make many excuses like, we can't help to do it right now, please call to claim department for further information, or they will transfer the call to NCD officer (so call authorized person) and let you hang on phone long time. !@#$%^*&()
Have a blessed day!
