Introduction
Figuring out how to calculate car NCD (No Claim Discount) can make a big difference when renewing insurance. If you’ve gone claim-free, you get a discount—but knowing how it’s calculated helps you see just how much you’re really saving. This guide explains the steps to calculate NCD, provides practical examples, and shares tips to avoid common record issues.
1. What is NCD?
- NCD (No Claim Discount) is a discount given to drivers who do not make any claims during their policy period.
- In Malaysia, the maximum NCD is 55% after 5 consecutive claim-free years.
- Standardized by Bank Negara, it applies to all insurers equally.
2. NCD Scale by Year
| Claim-Free Years | Discount % |
| 1 Year | 25% |
| 2 Years | 30% |
| 3 Years | 38.33% |
| 4 Years | 45% |
| 5 Years & Above | 55% (max) |
3. How to Calculate NCD
Formula:
Base Premium – (NCD % × Base Premium) = Premium After Discount
Example 1:
- Base Premium: RM2,000
- Year 3 (38.33% NCD)
- Premium After Discount = RM2,000 – (0.3833 × RM2,000) = RM1,233.40
Example 2:
- Honda Civic, Base Premium RM3,000
- Year 5 (55% NCD)
- Premium After Discount = RM3,000 – (0.55 × RM3,000) = RM1,350
This helps drivers clearly see how much they can save each year.
4. Situations Where NCD May Be Stuck or Not Updated
- NCD not reflected in ISM – delays may occur when transferring NCD to a new car.
- Old policy not updated by previous insurer – new insurer may not have the correct record.
- NCD locked – overlapping policies or ongoing claim investigations can block NCD.
- Claim dispute – unsettled claims may temporarily prevent NCD from applying.
Solutions:
- Check NCD via Bjak or JPJ.
- Contact your insurer for manual updates.
- Bjak quotations reflect the correct NCD once records are updated.
5. Key Tips Related to NCD
- Avoid claiming for small damages if repair cost < NCD savings.
- Add-ons like windscreen or natural disaster coverage do not affect NCD.
- NCD can be transferred to a new car under your name.
Conclusion
Understanding how to calculate car NCD is the easiest way to boost your savings at renewal. Keep your records in check and follow a few simple tips, and you won’t run into problems with outdated or locked NCDs. Platforms like Bjak ensure your premiums reflect your real NCD instantly, making renewal decisions faster and easier.
Read More:
Online Car Insurance Renewal Experience
