Understanding and Accumulating Your No Claims Discount (NCD) in Singapore

A No Claims Discount (NCD) is a key feature in Singapore car insurance, rewarding drivers for maintaining a claims-free record. NCD is a percentage discount on your car insurance premium that increases each year you do not make a claim, making your premiums more affordable over time.

How NCD works

• Starts at 0%: For new car owners or first-time policyholders, NCD starts at 0%.

• Annual Accrual: With each consecutive year you avoid making a claim, your NCD increases. Typically, it rises by 10% per year.

• Maximum Discount: After 5 consecutive claim-free years, you reach the maximum NCD of 50%.

Eligibility for NCD

• New Drivers: All new car insurance policyholders start building their NCD from 0%.

• Existing Drivers: Experienced drivers transferring to a new car can carry over their accumulated NCD, provided it is under their name and there are no lapses in coverage.

• Holder-Specific: NCD is always assigned to the policyholder, not to the vehicle. This means your NCD stays with you as long as you insure a car in your own name.

Building up and protecting your NCD

• Consistent Coverage Matters: Keep your policy continuous—lapsing or cancelling a policy often leads to partial or full loss of your NCD.

• Claims Impact: Making a claim (where you are at fault) usually results in a significant drop in the NCD, depending on your insurer’s rules. Multiple claims can severely reduce or even reset your discount.

• Myth-buster—Non-Transferability: NCD belongs only to the named policyholder—it can't be transferred to family or other drivers.

Checking and retrieving your NCD

You can check your current NCD via your insurer's portal, customer service, or annual renewal letter—and request an official NCD certificate when switching insurers.

For a deeper dive into how NCD works alongside other car insurance features, explore our overview of car insurance in Singapore.

NCD Accrual and Step-Back Table: At-a-Glance Reference

Understanding how your No Claims Discount (NCD) grows—and what happens if you make a claim—is essential for getting the most out of your car insurance savings. Here’s a simple table outlining the typical NCD progression in Singapore, including what occurs after one or more claims in a policy year.

How to read this table:

• Each year without making a claim increases your NCD, up to a maximum of 50%.

• If you make a single claim in a policy year, your NCD will usually step back by a few tiers—not all the way to zero, unless you’re in the earliest years.

• If you make 2 or more claims within the same year, your NCD is typically reset to 0%.

Example Timeline: Imagine you build your NCD over 4 claim-free years (reaching 40%), but then file a claim in Year 5. Your NCD in Year 6 drops to 10% instead of 50%. If you had 2 claims in that policy year, the NCD drops to 0% instead.

Note: While the above reflects common Singapore industry practices, always confirm the exact NCD step-back rules with your insurer, as details can differ.

For more guidance on car insurance savings strategies, check our car insurance in Singapore guide.

How claims and deductibles affect your NCD

Your No Claims Discount (NCD) is closely tied to the type of claim you make and how you handle repairs after an accident. Here’s how these elements interact—and what you should consider before deciding whether to make a claim.

At-fault vs not-at-fault claims

• At-Fault Claims: If you are responsible for an accident and need to claim on your car insurance, your NCD will be reduced at renewal. The reduction amount depends on your insurer’s step-back rules and your current NCD status, but it typically means losing several years’ worth of discounts.

• Not-At-Fault Claims: If you’re found not at fault and your insurer can fully recover the cost from the third party, your NCD usually stays intact. However, always confirm the recovery status with your insurer, as unresolved claims can still affect your NCD.

When does a claim lead to NCD reduction?

• Making any at-fault claim will decrease your NCD.

• A not-at-fault claim does not reduce your NCD—provided your insurer fully recovers the costs.

• If there’s shared liability or recovery is only partial, your NCD could be partially or fully reduced.

Should you claim or pay out-of-pocket for minor repairs?

• Repair costs below or slightly above your deductible: Pay for these yourself. Making a small claim leads to a bigger loss in NCD (and increased premiums) than the amount you might save.

• Major accidents or repairs far exceeding your deductible: It generally makes sense to claim, as the insurer’s payout outweighs the NCD penalty.

• Always get a repair quote first so you can weigh the claim against your deductible and potential premium increase.

How your deductible influences claim decisions

• Lower deductible (e.g., $500): You pay less per claim, but your annual premium is higher. More likely to make a claim for moderate damage.

• Higher deductible (e.g., $1,000): You pay more if you claim, but your premium is lower. The higher your deductible, the less worthwhile it is to claim for minor accidents—since your out-of-pocket payment covers most of the cost anyway.

• Choose a deductible level that matches your risk appetite: lower if you want peace of mind for smaller outlays, higher if you rarely claim and want to pay less each year.

Reporting requirements & claim type

• All accidents—no matter how minor—must be reported to your insurer within 24 hours or by the next working day. This is mandatory under the Motor Claims Framework. Failing to report can result in a denied claim and NCD loss, even if you don’t intend to claim.

• Reporting does not automatically mean a claim will affect your NCD—it’s the formal lodging of a claim (especially an at-fault one) that does.

Practical tips for common claim scenarios

• Always get repair estimates before making a claim. If costs are close to your deductible, paying yourself preserves your NCD.

• For minor fender benders (e.g., scratches, cracked lights), paying out-of-pocket is often smarter unless the other party makes a claim against you.

• Consider adding NCD protection to your policy if available, which may allow you to make 1 at-fault claim without a step-back.

Making thoughtful choices about claims and deductibles is key to maximising your NCD—protecting your hard-earned discounts while keeping insurance costs manageable.

How to Check, Prove, or Recover Your NCD

Managing your No Claims Discount (NCD) is essential—especially when switching car insurers, renewing your policy, or recovering after a coverage break. Here’s a practical, step-by-step guide on verifying, obtaining proof, or retrieving your NCD in Singapore.

1. How to check your NCD in policy documents

• Policy Schedule: Your current NCD is typically stated on the policy schedule or certificate of insurance, which you receive when you renew or purchase car insurance. Look for a section labeled “No Claims Discount” or “NCD Level.”

• Insurer’s Online Portal/App: Most insurers allow policyholders to log in and check NCD status under current policy details.

• Renewal Notices: NCD is often clearly displayed on your annual renewal letter or email, alongside your premium breakdown.

2. Requesting official proof from your insurer

If you are changing insurers or need formal evidence of your NCD:

• Contact Customer Service: Call or email your current insurer’s support team. Request an “NCD certificate” or “Letter of NCD Entitlement.” State your policy number for faster processing.

• Online Request: Many insurers have an online form or self-service portal where you can request NCD documentation.

• Processing Time: Allow a few working days for the insurer to issue the letter. Ensure your certificate shows your name, policy details, NCD percentage, and coverage period.

• Tip: Request this before your policy expires to ensure a smooth transfer to your new insurer.

3. What to do if your proof is lost or unavailable

• Immediate Re-Request: Contact your insurer promptly and explain the loss of your NCD proof. Insurers in Singapore are used to such requests and can reissue an official letter.

• Digital Copies: Check if you received the original letter by email or via the insurer’s mobile app. Many insurers provide downloadable documents.

• Verification by New Insurer: Some insurers can obtain your NCD status directly from your previous provider, especially if both operate in Singapore. However, it’s safest to provide official documentation to prevent delays.

• If the Insurer No Longer Operates: If your previous insurer has exited Singapore, approach the General Insurance Association (GIA) for advice or for potential records.

4. Steps if your NCD is questioned or transfer is challenged

• Double-Check All Documents: Review your policy schedule, past certificates, renewal letters, and any emailed correspondence for NCD details.

• Clarify with Both Insurers: If your new insurer disputes your NCD transfer, ask both old and new insurers to communicate and reconcile records.

• GIA verification and FIDReC mediation: The General Insurance Association of Singapore (GIA) can verify your NCD record across insurers if there's a transfer disagreement. For unresolved disputes, escalate to FIDReC (the Financial Industry Disputes Resolution Centre) for formal mediation.

• Maintain Consistent Coverage: Whenever possible, keep your insurance coverage continuous to avoid any potential issues with your NCD status.

Keeping your NCD proof on hand and staying proactive reduces hassles when switching car insurers or making future claims. For more insights on car insurance features and essentials in Singapore, visit our car insurance in Singapore guide.