If you have ever had to renew your car insurance and wondered why the premium has gone down (or up), the answer is always the same: No Claim Discount (NCD). No Claim Discount is the single biggest reason why the premium goes down when you renew your car insurance in Malaysia.
But how does it really work? What exactly is No Claim Discount? What happens when you make a claim? Let’s find out.
What Is No Claim Discount (NCD)?
No Claim Discount (NCD) is basically a reward from your insurance company.
If you don’t make any claims during your policy year, your insurer rewards you with a discount when you renew. The longer you drive without making a claim, the bigger your discount becomes.
Think of it as a “safe driver bonus.”
How Much Can You Save?
For Malaysia, if you're a private vehicle owner, you can enjoy up to 55% NCD, which is the maximum.
This is the pattern for the increase in NCD year by year:
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1st claim-free year – 25%
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2nd year – 30%
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3rd year – 38.33%
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4th year – 45%
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5th year and above – 55%
So if your premium is RM1,500 and your NCD is 55%, you're essentially paying for almost half the premium. That's the saving right there for being careful on the road.
What Happens If You Make a Claim?
This is where people are surprised.
If you make a claim and are at fault, your NCD will normally revert back to 0% at your next renewal. This can mean your premium goes up substantially. But not all claims will have an impact on your NCD.
For instance:
If you make a windscreen claim and you have purchased windscreen coverage, it will not impact your NCD. If it’s obviously the fault of another party and you make a claim off them, your NCD will still be okay.
So it’s always worth checking with your insurer before making a claim – it might actually end up costing you more in the long run if you make a claim!
Can You Transfer Your NCD?
Can You Transfer Your NCD?
The answer is: Yes, and this is good news.
Your NCD belongs to YOU – not your car.
You can:
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Transfer your NCD to a new car
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Switch your insurance companies and keep your NCD
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Switch between conventional insurance and takaful
But remember your NCD can only be used for ONE vehicle at any given time.
How to Check Your NCD
It is always good practice, before renewing your insurance, to check your existing NCD percentage.
You can check your NCD percentage online by accessing the following link:
https://www.mycarinfo.com.my/NCDCheck
It is quick and easy, and it could save you money by not paying more than you should.
Should You Protect Your NCD?
If you have already reached 55%, losing it can be painful.
There are some insurance plans that offer an add-on called NCD Protector, which allows you to retain your NCD even after one claim.
While it may not be required by all, if your premium is high, it may be worth considering. No Claim Discount is one of the simplest ways to lower your motor insurance premium costs in Malaysia. Drive safely, avoid making unnecessary claims, and check your policy before renewal. Your NCD can accumulate to save you hundreds, or even thousands, of ringgit.
If you're thinking of renewing your motor insurance policy, here are some tips for you to keep in mind:
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Check your NCD
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Compare coverage options
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Understand the claims process
Because sometimes, the lowest premium is achieved by being a good driver.