Owning a car in Malaysia comes with a hefty price tag, from monthly payments and maintenance to yearly insurance fees. With so many expenses to keep track of, it’s no surprise that the costs can quickly add up, leaving you with a shrinking wallet.
However, there’s good news for savvy car owners who want to save some cash – the No-Claim Discount (NCD) could be your ticket to reducing your insurance premiums.
What is No-Claim Discount (NCD)?
NCD is short for No Claims Discount, and it’s a program designed to incentivize responsible driving. Essentially, if you haven’t made any claims against your car insurance policy in the past year, you’ll get a discount on your next premium.
And the best part? You can accumulate up to a whopping 55% discount over time! By rewarding safe driving, NCD not only saves you money but also indirectly helps reduce the number of accidents on the road.
How is the No-Claim Discount (NCD) rate calculated?
The NCD rate is set by the Persatuan Insurans Am Malaysia (PIAM) and every insurance company in the country follows it. With the NCD, you could score a maximum discount of 55% for cars and 25% for motorcycles.
The NCD rates for private cars, motorcycles, and commercial vehicles are as follows:
| No-Claim Period | Private Car | Motorcycle | Commercial Vehicle |
| 1st year | 0% | 0% | 0% |
| 2nd year | 25% | 15% | 15% |
| 3rd year | 30% | 20% | 20% |
| 4th year | 38.33% | 25% | 25% |
| 5th year | 45% | 25% | 25% |
| 6th year onwards | 55% | 25% | 25% |
Did you know that if you go just one year without making a claim, you’ll be eligible for a sweet 25% discount on your premium when you renew your policy? And it only gets better from there. If you can manage to avoid making claims for five whole years, you’ll reach the maximum discount rate of 55%. Imagine that!
Starting from your sixth year of renewal, you can enjoy a whopping 55% discount on your basic premium for the rest of your life, as long as you maintain your clean driving record. So, why not start racking up those NCD points and watch the savings pile up?
How to protect your No-Claim Discount (NCD)?
You can save money on your insurance premiums and promote safe driving with NCD! Not only that, but NCD also encourages you to be a wise policyholder by discouraging unnecessary claims. Because if you or someone else makes a claim, and you’re at fault, your hard-earned NCD could be reset to zero. That’s right, you’ll have to start from scratch!
If the damages aren’t too severe and you can afford it, it might be wise to foot the bill yourself. Why, you ask? Because making a claim could cost you your No Claims Discount (NCD). So, before you pull the trigger, consider the consequences and protect your NCD.
You can get add-on coverage to protect your NCD. For instance, a windscreen insurance add-on to your existing policy allows you to file a claim with your insurer for any windscreen damage without it affecting your NCD. That’s right, you can still enjoy the benefits of your NCD while getting your windscreen fixed hassle-free!
What happens to NCD in a road accident?
Your NCD won’t reset automatically after an accident. The outcome depends on fault and settlement. Here are some of the different scenarios:
You didn’t cause the accident but your car is damaged
You can file a No-Fault Own Damage claim with your motor insurer and get compensated for the damages. Your NCD stays intact, so you won’t have to pay extra for insurance premiums. Alternatively, you could file a Third-Party Property Damage (TPPD) claim with the at-fault party’s insurer, but be warned – the process can be a bit of a hassle.
You caused the accident
In case you caused the accident but still want to keep your NCD, you could choose to pay for the damages yourself. This way, you might end up paying less than what you’d lose from your NCD. That’s why many drivers prefer to settle privately. However, please note that if you file an Own Damage Claim or the other party files a claim, it will still impact your NCD.
Hit-and-run
First, file a police report and give them any evidence you have, such as witness statements or dashcam footage. The police will be able to determine fault and help you out. If they confirm that you’re innocent, you can file a No-Fault Own Damage claim and keep your precious NCD.
However, if you’re unable to track down the other vehicle’s registration number, you’ll have to foot the bill for damages. If you decide to file an Own Damage Claim with your insurer, be prepared to lose your NCD.
Where to check your current NCD?
You can check your NCD rate online instantly for free. Just follow these easy steps to do it online:
1: Head over to MyCarInfo
2: Enter your vehicle plate number and NRIC
3: Click ‘Get My NCD Record’ OR if you have a company vehicle, type in the business registration number
4: You’ll now have access to the following information:
i. Current NCD Percentage
ii. Current NCD Effective Date
iii. Next NCD Percentage
iv. Next NCD Effective Date
This applies to all vehicle types, including motorcycles and rental vehicles.
Does NCD have an expiry date?
The expiry date of your NCD hinges on whether or not you choose to renew your motor insurance. For example, if you have a 55% NCD entitlement but decide not to renew your insurance next year because you won’t be using your car, your NCD will be reduced to 45% in the following year.
Protect your No-Claim Discount (NCD)
Although it may seem insignificant, having a higher No-Claim Discount (NCD) can make a significant difference in reducing road accidents. Not only that, but it also serves as a reward for safe driving habits. Why not take advantage of the opportunity to save money while being a responsible driver?
Hope for the best but prepare for the worst. We can’t always anticipate what may happen on the road, but having a higher NCD can provide a sense of security. So, make it a priority to increase your NCD each year and reap the benefits of safe driving.
Bjak is one of Malaysia’s biggest insurance comparison websites, offering policies from over 10 brands. Get your free insurance quote from Bjak today!
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