No-Claim Discount (NCD): The Complete Guide

When it is time to renew your car insurance, you may come across something called NCD in your policy cover note. But… What exactly is NCD?

What Is No-Claim Discount (NCD)?

NCD is short for No-Claim Discount, also known as No-Claim Bonus. NCD is like a special reward from your insurer if you manage to avoid making any claims for a certain period. In simpler terms, if you have not made any claims in the past year, you get a discount on your next car insurance renewal.

Why NCD Is Important

Consider NCD as a thank-you gift for being a careful driver. It kicks in when it is time to renew your insurance, making your motor insurance cost less and giving you extra savings.

The longer you drive without making a claim, the bigger this discount becomes. Over time, you can even collect and stack it up to 55% off.

So, when you see NCD on your insurance, think of it as your bonus for driving safely (and key to paying less for car insurance).

How NCD Rate Is Calculated

In Malaysia, the NCD rate is determined by the Persatuan Insurans Am Malaysia (PIAM), and the rate is as follows:

No-Claim Period NCD Rate
1 year 0%
2 year 25%
3 year 30%
4 year 38.33%
5 year 45%
>6 year 55%

How to Check NCD Rate

You have two options to check your current NCD: you can visit the Central NCD Database, or you can instantly check your NCD for free with us!

Can NCD Expire?

Your NCD cannot expire, but it can decrease. If you do not renew your car insurance, your NCD rate will gradually decrease based on the number of years you do not renew.

For instance, if your NCD is 55% but you decide not to renew it next year, then in the second year, your NCD will be 45%.

If you continue not to renew your car insurance in the following years, your NCD entitlement will continue to decrease until it reaches 0%.

How to Maintain NCD

The key to maintaining your NCD is pretty straightforward: avoid making claims whenever possible. However, there are situations where this may not be practical.

If you find yourself in a position where you need to make a claim without affecting your NCD, consider these options:

  1. If the accident is not your fault, make sure to provide a police report as proof.
  2. Check if your policy includes specific add-ons, like a windscreen add-on or any exclusive PolicyStreet add-ons (claims made under these add-ons will not impact your NCD).

If the damages are manageable and you can cover the costs yourself, it might be a wise move. Because making a claim could affect your NCD.

Hence, before deciding to file a claim, weigh the pros and cons to maintain your NCD. It is like protecting a valuable bonus that rewards your safe driving habits.

What Happens to NCD After Making a Claim?

Let us break down what happens to your NCD if you need to make a claim:

Firstly, having an accident will not automatically reset your NCD. The effect on your NCD depends on who is at fault and how the accident gets resolved. Here are a couple of examples to help you understand:

Example 1: If the accident is not your fault

  1. File a No-Fault Own Damage (ODN) claim with your insurer. You will get compensated for your damages without losing your NCD; or
  2. File a Third Party Property Damage (TPPD) claim with the responsible party’s insurer. Ensure you provide a police report as evidence; or
  3. Settle privately with the other party.

Example 2: If the accident is your fault

  1. To maintain your NCD, consider paying for the damages yourself, especially if the cost is less than what you would save with your current NCD; or
  2. In cases of severe damage, filing a claim with your insurer becomes necessary. However, note that this will affect your NCD.

What Happens to NCD If You Change Your Insurer?

Great news! If you are thinking of switching to a different insurer, you get to keep the NCD you have earned over the years with your current insurer. This is because your NCD is linked to your IC number.

Changing insurers is easy. Just choose your new insurer and buy your policy. When you ask for a quote, your NCD will automatically be displayed, making the transition smooth and straightforward.

Can You Transfer Your NCD?

Transferring your NCD involves a few considerations:

  • To another individual: No. Unfortunately, you cannot pass on your NCD to another person, even if they are a family member. This restriction exists because the NCD is tied to your IC number. Additionally, even if you sell your car, the NCD cannot be transferred to the new owner.
  • To another vehicle owned by you: Yes. You have the flexibility to transfer your NCD to another vehicle that you own. Simply contact your insurer with the request. However, you may be required to settle the prorated NCD withdrawal premium for the old car before the transfer is finalised. Some insurers may also request a copy of your cover note as proof of your current NCD rate.
  • Between vehicle types: No. The NCD cannot be transferred between different types of vehicles. Whether it is from a car to a motorcycle or the other way around, the NCD remains specific to the vehicle class it was earned on.


In conclusion, understanding the ins and outs of the No-Claim Discount (NCD) is key to navigating the world of car insurance effectively. As a driver, the NCD serves as a valuable reward for your safe and responsible habits on the road.

Whether you are renewing your policy, considering switching your insurer, or pondering the implications of a claim, your NCD plays a big role in shaping your insurance experience.

By appreciating its significance and making informed decisions, you not only enjoy cost savings but also contribute to a safer driving community.

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