Car Insurance Premium Breakdown: Base Premium, Loading, NCD, SST and Stamp Duty
Your car insurance price is made up of several components: base premium, any applicable loading, NCD discount, add-ons, service tax and stamp duty. Understanding these items helps you see how your final payment is calculated.
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- Sum insured affects your price. A higher sum insured usually means a higher premium.
- Loading may increase your premium. It applies when an insurer assesses a higher risk.
- NCD can reach 55%. It reduces your eligible premium.
- Service tax is 8%. The rate increased from 6% on 1 March 2024.
- Stamp duty is RM10. It is generally shown as a separate charge.
How your car insurance price is calculated
A typical premium breakdown includes:
Base premium for your selected coverage.
Any applicable loading.
NCD deduction.
Premiums for selected add-ons.
8% service tax on the taxable premium after applicable discounts.
RM10 stamp duty.
The exact calculation and presentation may vary between insurers.
NCD and add-ons
NCD: Your discount for claim-free years
The standard private car NCD scale is:
| Claim-free years | NCD |
|---|---|
| 1 year | 25% |
| 2 years | 30% |
| 3 years | 38.33% |
| 4 years | 45% |
| 5 years or more | 55% |
An at-fault claim may affect your NCD at the next renewal, subject to policy terms and applicable protections. Your eligible NCD can be transferred when you switch insurers.
Check your discount using the BJAK NCD checker and learn about NCD relief and protector.
Add-ons: Extra protection, extra cost
Add-ons increase your premium. In the insurer PDS examples reviewed, they are added after the NCD deduction, so NCD does not reduce their cost. Check your own quotation for the calculation used.
Common options include:
Service tax and stamp duty
- Service tax: 8% since 1 March 2024, replacing the previous 6% rate.
- Stamp duty: Generally RM10 per motor insurance policy.
Service tax is generally calculated on the taxable premium after applicable discounts or rebates. Check your insurer's quotation for the full breakdown.
Worked example (illustrative only)
This example uses made-up figures to show how the calculation works.
| Step | Amount | Running total |
|---|---|---|
| Base premium | RM2,000.00 | RM2,000.00 |
| Loading (10%) | +RM200.00 | RM2,200.00 |
| NCD (30%) | −RM660.00 | RM1,540.00 |
| Add-ons | +RM200.00 | RM1,740.00 |
| Service tax (8%) | +RM139.20 | RM1,879.20 |
| Stamp duty | +RM10.00 | RM1,889.20 |
Total payable | RM1,889.20 | |
The example assumes NCD is deducted after loading and service tax is calculated on the remaining premium plus add-ons. Actual quotations may differ.
Read how to understand a car insurance PDS for more details.
Frequently asked questions
Your insurer may have assessed your vehicle or driver profile as higher risk. Each insurer uses its own pricing and underwriting methods.
In the PDS examples reviewed, NCD is deducted before add-ons are added. Check your quotation because the calculation may vary.
The rate increased to 8% on 1 March 2024. Older documents may still show 6%.
Compare the full price before renewing
Two policies with the same base premium can have different final prices because of loading, NCD, add-ons and other charges. Compare the total amount and coverage before choosing.