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NCD and car insurance excess affects the named driver's (you) car insurance premium. Get cheap car insurance when you understand how these terms work.
Category: Car Ownership Advice
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Before you get your very first car insurance quote, here are some basic car insurance terms that you should know.
- No-Claims Discount (NCD)
- Excess in car insurance
- Named Driver(s)
No-Claims Discount (NCD)
What is NCD in car insurance?
NCD refers to "no-Claims discount" and it's given by insurers to drivers who practice safe driving.
You're entitled to an NCD if you've stayed claim-free for at least a year. The longer you stay claim-free, the higher your discount becomes - your NCD can go up to 50% and that'll save you big bucks in the long run!
Here's how it works:
| Period of insurance with no claims | Discount on renewal |
| 1 year | 10% |
| 2 years | 20% |
| 3 years | 30% |
| 4 years | 40% |
| 5 years or more | 50% |
Most Singaporean drivers practice safe driving and use NCD to get cheap car insurance. It's one of the easiest ways to lower your car insurance premiums.
What happens to my NCD after a claim?
Your NCD privileges won't be revoked just because you've made a claim. You'll only lose your NCD if your liability is more than 20%.
However, should you're found to be "at fault", your NCD could very well be affected. Insurers can lower your NCD by 10% or more, depending on their policies.
For instance, if your NCD is 30% and you've been found to be largely responsible for it, your NCD can drop to 0% and you'll need to start from the bottom once again.
Here's what it looks like:
| Current NCD | NCD after one claim |
| 50% | 20% |
| 40% | 10% |
| 30% or less | 0% |
Can my NCD be protected?
Your NCD can be protected with an NCD protector. An NCD protector allows you to make one claim under your car insurance policy without losing your NCD privileges.
You'll need to pay an extra fee for the NCD protector scheme, and the fee varies across insurers. Most insurers will offer you the scheme once yours reaches 50%, but whether it's worth buying is another question.
Accidents are inevitable even for the safest drivers. So, if you have an NCD protector that allows you to make ONE claim, the 50% discount that you've been carefully accumulating over the years will be protected.
While it does cost more to own an NCD protector, you're still paying for cheap car insurance thanks to your NCD.
Is my NCD transferable?
You can transfer NCD from one car to another, but only if your vehicle remains within the same category of being a Private Car. You will not, however, be able to transfer your NCD to a commercial vehicle.
Do take note that your NCD may not apply for your second car. So, while your first car has a 50% discount, your second car may not enjoy the same privileges even though you're the driver.
Will I lose my NCD if I sell or scrap my car?
No, you won't lose it instantly. Most car insurance companies in Singapore allow drivers to retain their NCD for up to 24 months, but some insurers only let you keep it for 12 months - clarify with your insurer before you make such plans. Here's all you need to know about your NCD.
Excess in car insurance
What is car excess in insurance?
A car insurance excess is the sum payable, from your own pocket, before your insurer covers the rest of the damages.
Under your insurance policy, if you have an excess of $500 and the repair costs - of an unfortunate accident - amounts to $3000, you'll only need to pay $500. Your insurer covers the remaining $2500.