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Everything Malaysian drivers should know about No Claim Discount (NCD) in Malaysia

When you are looking through your insurance policy, you will notice the abbreviation NCD followed by a percentage. Are you familiar with the term NCD and how it affects your insurance premium?

No Claim Discount (NCD) is a motor insurance premium discount given to you if you have not had a claim made against you or by you in the previous policy year, provided your insurance is for more than one year. As long as you have not made any claims on your insurance policy in the prior insurance year, you are entitled to the NCD rate decided by Persatuan Am Insurans Malaysia (PIAM). The following table summarises the rate of NCD:

Claim Free Year of InsuranceNCD Entitlement
First Year0%
After 1 continuous claim free year25%
After 2 continuous claim free years30%
After 3 continuous claim free years38.33%
After 4 continuous claim free years45%
After 5 continuous claim free years and beyond55%

NCD is a significant factor in deciding the amount of your insurance premium. It’s similar to receiving a bonus for maintaining a spotless claim history. For instance, if you have not made a claim on your online car insurance policy for 6 consecutive years, you will be eligible for a 55% NCD on your car insurance. If your car insurance premium is RM2,000 with a 55% NCD, you are only required to pay RM900, excluding sales tax and stamp duty. This is a significant saving, as you will be paying less than half the original price.

If you have just purchased your first car and are a new car owner, your NCD will be 0% for the first year, and you must be claim-free for at least 6 years to be eligible for the highest NCD percentage, which is 55%.

What happens when you are involved in a self-inflicted accident and need to file a claim on your car insurance? In this case, your NCD entitlement will revert to 0% at the next renewal and you will need to continue claiming free for another 6 years to maintain the 55% NCD. It makes no difference what level your current NCD entitlement is if you or someone else make a claim against you and your NCD entitlement will revert to 0% on the next renewal.

What if, on the other hand, the accident was not your fault, and you are compelled to make a claim with your online car insurance carrier to cover the cost of the damage? If your insurance policy is comprehensive, you may be eligible to claim ODKFK also known as Own Damage Knock-for-Knock. You may claim your own car insurance under the ODKFK claim without jeopardising your NCD status if you have a Police Investigation Outcome establishing that the third party was at fault. As a result, when your car insurance policy is renewed, you will continue to be eligible for NCD.

However, there are several exceptions when it comes to ODKFK claims, such as the ones listed below:

  1. If the third-party vehicle is used for hire and reward, such as Grab/Uber, taxi, hire buses or school buses,
  2. If the third-party vehicle is not insured,
  3. If there is third-party bodily injury involved, regardless of who is at fault,

The ODKFK claim cannot be used in the scenarios listed above, and you must file an Own Damage claim instead. As a result, your NCD will be impacted.

What if your windscreen gets shattered by an object like a rock while you're travelling along the road? In such a case, you must file a claim with your own insurance for your own damage, and yes, your NCD will be 0% on the following renewal, and your car insurance premium will increase.

However, this problem can be prevented by purchasing additional Windscreen covers for your vehicle. If you have add-on Windshield coverage for your vehicle, any damage or repair to your vehicle's windscreen or sunroof will be claimed on the Windscreen claim rather than the Own Damage claim. As a result, your NCD entitlement will not be affected.

The No Claim Discount is tied to the vehicle's owner individually. If you own multiple private cars, you can have multiple NCD. If you sell your old vehicle and decide to purchase a new one, the NCD from the old vehicle can be transferred to the new vehicle. If, however, you do not acquire a new vehicle and your NCD remains unused after one year, it will be reversed .

Additionally, you can withdraw your NCD from your existing vehicle and transfer it to your new vehicle if you decide to acquire a new vehicle without selling your present one. Transferring NCD from your previous vehicle enables you to save money on your new vehicle's insurance.

You can check your NCD entitlement on MyCarInfo with just your vehicle registration number and your ID Number while the NCD information is freely available to the public, your personal information is protected.