NCD Talk: Transferring NCD from one car to another and other useful tips | Insurance Advice from CompareKaki, Your Compare “Buddy”
If you have owned a car for a few years now, you know that paying the insurance premium on your car year after year can become less and less of a burden, particularly if you are a safe driver and have had no accidents.
This is all due to the NCD (no claim discount).
The first year you buy your car, you are paying the full premium for your car insurance. But you are rewarded from your second year onwards with a little discount on your premium IF you don’t get into any accidents and make substantial claims on your insurance. Hence, the name ‘no claim discount’.
How the NCD works is that the longer you go without claiming for an accident from your insurer, the more discount you get. In the first year, your discount is 10%. In the second year, it is 20% and so forth, capped at a maximum discount limit of 50%.
The table below shows the NCD you can enjoy from the first year of no claims.
Private Car Policies
|Period of insurance with no claim||Discount on renewal|
|5 years or longer||50%|
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Here are a few other things you need to know about NCD:
1. Transferring NCD from old car to new car
Does the NCD belong to the car or to its owner? In short, NCD applies to YOU and not the vehicle. Unless you own more than one car. If you own two cars and one car’s NCD is at 10% and the other is at 30%, and you choose to sell one of the cars, you can transfer the NCD on the car that you choose to sell. The NCD is transferable from an old car to a new car.
If you have already sold off your old car, an immediate transfer of the NCD to the new car is possible. However, if you did not own a car for more than 24 months (depending on your insurer), your NCD is automatically gone and you will have to start from scratch.
2. NCD can never be transferred one owner to another
Your insurer MAY allow you to change the ownership of an NCD to your spouse, subject to your insurer’s approval. Otherwise, the NCD is non-transferable.
3. You cannot transfer your NCD from one class of vehicle to another
If you have been riding a motorcycle for the last 5 years and your NCD is 50% and you decide to buy a car later on, you will not be able to transfer your NCD from one class (motorcycle) to another (car). This also applies to trucks, lorries, buses and other vehicle classes.
4. You CAN transfer your NCD from a company to personal vehicle
If you are driving a company car and wish to transfer the NCD to a personal car after a year, you can do that with the proper documentation subject to insurers approval. You have to get your company to issue a formal document stating that you have been the sole driver of the car.
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5. Not all claims will affect your NCD
If you are involved in an accident with a third party vehicle, and are found to be completely not at fault, then your NCD will not be affected.
6. What happens when your NCD is reduced
If you do get into an accident and you are found to be liable, your NCD will be reduced.
This is how your NCD will be affected after 1 claim.
Private Car Policies
|Current NCD||NCD after 1 Claim|
|30% and under||0%|
Commercial Vehicle & Motorcycle Policies
|Current NCD||NCD after 1 Claim|
However, if you make two claims in a year, your NCD will go to zero.
7. You can get an NCD protector
Some may think you are a little paranoid, but hey, if you’ve worked so hard to get your NCD up to 50%, you don’t want to lose it. You can get your NCD protected by your insurer with an NCD protector. Most insurers will only allow you to get this NCD protector if your NCD is at 50%. The protector will retain your NCD at 50% after you make a claim from an accident with a liability of more than 20%.
For other car owners, they may choose to do a private settlement, if the amounts are not too large, so that their insurance and their NCD would not be affected.
|Claims made during the period of insurance||Protected NCD Entitlement upon renewal with same insurer (Private Car only)||NCD Entitlement upon renewal with new insurer (Private Car only)|
|Three or more||Nil||Nil|
Do note that your protected NCD may not be transferable to another insurer, and it will also not protect you against a non-renewal or cancellation of your policy by your insurer.
8. You can exchange your NCD between cars
Say your first car is a Honda and the premium is reasonable. But for your second car, which you have decided to buy 5 years after you got your Honda, you have decided to buy a bigger, more expensive car, like a BMW. The premium on the BMW is much higher than on the Honda. Here, to save cost, you can actually exchange the NCDs on both cars so you would have 50% NCD on the BMW, while you have to start from 0% on the Honda all over again. If you work this out and the numbers make sense for you to exchange the two, you could save hundreds a year.
What’s interesting, is that CompareKaki, a leading car insurance comparison site in Singapore, can help you to make these NCD transfers between your vehicles, or between you and your spouse for free if you purchase your car insurance through their platform.
At the end of the day, it’s essential to remember, the NCD is designed to recognise and reward safe drivers who have no accidents and make no claims.
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