Want to know how much your No Claim Discount (NCD) actually saves you on car insurance? You can work it out in a minute with a simple formula, as long as you know your NCD rate and your basic premium.
NCD is a discount you earn for every year you go without making a claim that affects it. For a private car in Malaysia, it can grow to a maximum of 55%. This guide shows you how to calculate it, gives worked examples at every level and explains how to check the NCD you are really entitled to.
What is NCD and how does it work?
NCD is a discount on the premium of your motor insurance policy or motor takaful certificate. It rewards drivers who complete a full policy year without a claim that affects their NCD.
For private cars, the NCD scale is fixed under the motor tariff, so it is the same at every insurer and takaful operator. Each claim-free year moves you one step up the scale until you reach 55%.
Claim-free years completed
NCD rate
None yet
0%
1 year
25%
2 years
30%
3 years
38.33%
4 years
45%
5 years or more
55% (maximum)
Motorcycles and commercial vehicles follow a different, lower scale. If you want more background on how NCD is also called No Claim Bonus, read our guide on what NCB means in car insurance.
How to calculate your NCD
The formula is straightforward. Multiply your basic premium by your NCD rate to get the discount, then subtract the discount from the basic premium.
NCD discount = basic premium × NCD rate
Premium after NCD = basic premium − NCD discount
For example, if your basic premium is RM1,200 and your NCD is 45%, your discount is RM1,200 × 45% = RM540. Your premium after NCD is RM1,200 − RM540 = RM660.
Worked examples at every NCD level
The table below uses the same RM1,200 basic premium so you can see how each step on the scale changes what you pay.
NCD rate
Discount on RM1,200
Premium after NCD
0%
RM0
RM1,200
25%
RM300
RM900
30%
RM360
RM840
38.33%
RM459.96
RM740.04
45%
RM540
RM660
55%
RM660
RM540
At 55%, you pay less than half of the basic premium. That is why protecting your NCD matters so much over the years.
What the calculation does not include
These figures are estimates only. NCD is a discount on the applicable basic premium, so it does not make every charge on your policy 55% cheaper.
Your final price also depends on the type of cover you choose, your car’s sum insured, any add-ons you buy, tax and stamp duty. Each insurer and takaful operator also prices risk differently, so two quotes with the same NCD can still differ. To estimate the full price, see our guide to the car insurance calculator in Malaysia.
How to check your actual NCD
A manual calculation is only useful if you use the right NCD rate. Do not assume your rate from how many years you have owned the car, because a past claim, a change of vehicle or a gap in cover can all affect it.
NCD records are kept in an industry system run by Insurance Services Malaysia (ISM), which insurers use to confirm NCD at renewal. You can check your NCD in a few ways:
BJAK NCD Checker: enter your car’s registration number and the owner’s IC number on the BJAK NCD Checker to see your current NCD before you renew.
MyCarInfo: ISM’s public portal has an NCD Enquiry service that shows the NCD of an insured vehicle.
Your insurer or takaful operator: your current provider can confirm your NCD and your policy renewal details.
If the NCD shown does not match what you expect, contact your insurer or takaful operator before you pay for your renewal. Have your previous policy or certificate ready as proof. Keep in mind that NCD is an insurance record held by the insurance industry, not a JPJ record.
What can change your NCD?
Your NCD can go up, stay the same or drop back to 0% depending on your claims and how you manage your policy.
Making an own damage claim
If you are at fault in an accident and claim for your car’s repairs under your own policy, Bank Negara Malaysia states that you will lose your NCD entitlement. At your next renewal, your NCD usually returns to 0% and you start building it again.
If another driver caused the accident, you may be able to make an Own Damage Knock-for-Knock (OD-KFK) claim with your own insurer. According to Bank Negara Malaysia, this does not affect your NCD as long as you have a comprehensive policy and the claim meets the conditions, for example no third-party bodily injury claim is involved. Learn more in our guide on what a knock-for-knock claim is.
Letting your policy lapse
A long gap between your old policy and your new one can cost you your NCD, and once it resets to 0% you have to rebuild it year by year. The safest habit is to renew before your policy expires. Our guide on NCD gap period rules in Malaysia explains the time limits in more detail.
Can you transfer NCD to a new car?
Yes, in most cases. NCD is tied to you as the policyholder, so you can usually move it from your old car to a new car registered in your name, subject to your insurer’s terms.
You cannot transfer your NCD to another person, and it generally cannot be split between two cars. Switching insurers or takaful operators at renewal does not make you lose your NCD either, because your entitlement moves with you.
Tips to make the most of your NCD
Check your current NCD before every renewal so you are not overcharged because of a record error.
Renew on time to avoid a gap in cover.
Think twice before making a small own damage claim when you have a high NCD.
Ask whether the accident qualifies for a knock-for-knock claim if you were not at fault.
Compare quotes from several insurers and takaful operators, since your NCD is the same everywhere but premiums are not.
On BJAK, you can get and compare quotes from multiple insurers and takaful operators in one place.
Conclusion
Calculating your NCD is easy: multiply your basic premium by your NCD rate and subtract the result. For private cars, the discount climbs from 25% after one claim-free year to a maximum of 55% after five.
Before you rely on any calculation, check your real NCD through the BJAK NCD Checker, MyCarInfo or your insurer. Once you know your rate, comparing quotes becomes much easier and you can see exactly how much you save.
What is the maximum NCD for a private car in Malaysia?
The maximum NCD for a private car is 55%, which you reach after five or more consecutive claim-free years. The scale is the same at every insurer and takaful operator.
How do I calculate my NCD discount?
Multiply your basic premium by your NCD rate. For example, a RM1,200 basic premium with 45% NCD gives a discount of RM540, so you pay RM660 before add-ons, tax and stamp duty.
Why is the NCD for the third year 38.33%?
That is the rate set on the private car NCD scale after three claim-free years. It sits between 30% for two years and 45% for four years.
Where can I check my NCD online?
You can use the BJAK NCD Checker with your car registration number and the owner’s IC number, or the NCD Enquiry service on ISM’s MyCarInfo portal. Your insurer or takaful operator can also confirm it.
Will a knock-for-knock claim reduce my NCD?
No, provided you were not at fault, you have a comprehensive policy and the claim meets the conditions, such as no third-party bodily injury claim being involved.
Do I lose my NCD if I switch insurers?
No. Your NCD entitlement moves with you, so you keep it when you renew with a different insurer or takaful operator.
Nabil Farhan· · 6 min read
