What is NCD? And is it worth buying a NCD Protector

ncd protector insurance  

There is research done that proves that there is co-relation between your driving style and your personality.


In most motor insurance company’ eyes (sadly), “the safest drivers win us all”. Why is that?




The safest drivers are rewarded by the motor insurance company, in monetary terms.


It is called NCD - No-Claim Discount !


Yes, NCD rewards Driver and not the Car


Say you have been accident-free for a number of years and obtained a NCD of 50%. If you sell your car and buy another car now, will it affect your NCD? Definitely not, your NCD will remain, as the NCD follows the driver, not the car.


However, if you buy an additional car, your NCD will not apply automatically to the second car. You have to earn the NCD on a ”per car” basis.


So how do you “earn” NCD?


By driving very carefully! True and… it’s calculated by the number of consecutive years that you have not made any claims. The discount will be accumulated in increments of 10% and realized in the next car insurance premium.


See the below table for details:



Percentage of No-Claim Discount (NCD) awarded



Private Car


Made no claim

for 1 year


Made no claim

for 2 years


Made no claim

for 3 years


Made no claim

for 4 years


Made no claim

for 5 years

  10% 20% 30% 40% 50%

Motorcycle & Commercial Vehicle














There is a different rate of increase for motorcycle and commercial vehicle as shown in the table above. In normal cases, the maximum NCD of 50% will be reached after 5 years for private car, whereas maximum NCD of 20% will be reached after 3 years for motorcycle and commercial vehicle. Some insurers may give extra discounts on top of the maximum NCD, say if the driver has maintained a NCD status of 50% for 5 years and above. You may wish to compare before you decide on your motor insurance.


If you recall the definition of “no claim” to earn NCD, does that mean you will lose your NCD once you make a claim? Not necessarily.


    1. If you are not at fault for the accident and the fault is confirmed by the insurer from the other insurer from the other party, you can make a claim without losing your NCD.
    2. A thing called “NCD protector” can keep your NCD status safe.


By paying an extra 10% more in premiums, drivers are protected by a rider for one claim in the year. This is mainly a benefit offered by insurance company to drivers with a NCD status of 50%. Understand more about NCD protector now.



So how NCD is lost?


Making a claim in the year will cause your NCD to drop by 30%. You can see from the table below, for drivers with a NCD status of 30% or below, their NCD after one claim will turn to 0%. It is more restrictive for drivers of motorcycle and commercial vehicle to maintain their NCD status, as they will lose their NCD after one claim, even they have kept an accident-free record for 5 years or above.



Private Car


NCD before claim

NCD after ONE claim





40% 10%

  30% and below 0%

Motorcycle & Commercial Vehicle


20% and below






How can you protect your NCD?


Drivers will need to declare their NCD by the time they purchase a motor insurance policy, and the insurance company will verify the NCD and the driver. If it is confirmed by the previous insurer that you have a lower NCD than that you declared, the motor insurance company would amend your policy and request the additional premium from you.


Trying not to report the accident to your motor insurance company? Insurers would penalise the dishonest act by reducing 10% further on top of your NCD deduction.


It is hard thinking of the many tricks to protect your NCD. If your motivation is to keep your NCD safe and sound, why not buy a NCD Protector officially from your motor insurance company instead?


As mentioned earlier, a NCD Protector can cover you from the loss of your NCD. It is a rider, an add-on to your motor insurance policy.



How does a NCD Protector work?


The NCD protector allows you to make ONE claim under your policy without losing your NCD status. It costs an extra 10% more in premiums but reserves your 50% NCD status despite a claim.


Assuming that the NCD before claim is 50%.



NCD on Renewal


After ONE claim

After TWO claims

After THREE or more claims


With NCD Protector







Without NCD Protector










Worth buying ? Let’s compare , calculate and see.


Say the premium of a motor insurance is $1000, and the NCD Protector rider is $100 (10% of the Premium). Assuming that you have a NCD status of 50%. If nothing goes wrong, you will pay $500 for your premium in the subsequent year.


Unfortunately, you run into an accident and have no choice but to make a claim towards your motor insurance company. At this crucial moment, you have your NCD protector by your side, ta-da! you will pay a premium of $500 next year on your renewal.


This is the reason why InsureDIY will suggest that you purchase a NCD protector by all means. Yes, it takes an extra 10% of your premium but it’d save you years in accumulating for your NCD in the event of an accident. Accident, by definition, is an incident happening unexpectedly with undesirable results. It’s not saying that we do not care about the cause of an accident, but accident is by nature is unforeseeable and it can happen to anyone at any point in time.


Above is the market practice on how a NCD protector works. There are insurers out there trying to attract customers by reducing a lower percentage of your NCD in case of a claim or offering a lifetime NCD guarantee as long as you stay with them. But what you should not is that a NCD protector is non-transferrable between insurers (that means your NCD can go back to 20% or 0% after a claim if you switch to another insurer), so it’d be wise to get a comprehensive quote and compare before purchasing your motor insurance .



Why would the motor insurance company reward a NCD after all?


By rewarding safe driving behavior, the insurance company can have a better risk control on their pool of customers, and maintain a reasonable premium level in the long run.


As a responsible driver, you can take advantage of a NCD and enjoy discounts on your renewal premium. What a win-win! But do note that NCD is weighed differently by motor insurers and it’s always good to compare, no matter you are purchasing a new policy or renewing your old policy.


Check out now the premium range and coverage of the top motor insurance policy in Singapore.


Read more on car insurance or get a quote for your vehicle!