First thing first, what exactly is NCD?
In case you guys don’t know, NCD is a discount that you’ll get every year when you want to renew your car/motorcycle insurance.
Unfortunately, there are conditions for you to meet to enjoy these perks, which are:
- You haven’t made a single insurance claim within the 12 months after you’ve bought/renewed your car/motorcycle insurance AND
- No claim has been made against you by a third party
For your info, NCD rate can reach up to 55% in just 5 years. Isn’t that amazing? In a way, this will encourage road users like you to be more careful on the road. If you don’t get into an accident, you wouldn’t need to make a claim thus your NCD will stay intact!
One thing you should know about NCD is that it sticks to your name (as the nominee). It doesn’t stick to your vehicle/insurance. So, it’s safe to say that you can continue to transfer your NCD whenever needed in the future.
Here are some things you should note regarding NCD…
It depends on who's at fault here and how you claim your insurance. Here's the list of things that wouldn't affect your NCD:
- If you use your hard-earned money to repair the damage and didn't claim the insurance.
- The third-party pay for your damage, so you don't have to
- Can also claim No-Fault Own Damage (NFOC) if the third-party doesn't take any responsibility. Although you guys did make a claim, it wouldn't affect your NCD
- Your NCD will also depend on the police report. That’s why it's the number one thing to do within 24 hours.
- If you've additional coverages in your insurance policy (doesn’t touch your main insurance) like windscreen coverage
HOWEVER, your NCD will be affected if you're at fault in case of an accident. The same goes if you've claimed to repair any damages that aren't included in your policy.
So, what's the NCD rate in Malaysia?
Here's the thing about NCD rate, it'll keep increasing every year if you don't make any claim - which is a great thing because it means you’ll be paying a lower premium over time. You may check the NCD rate from Persatuan Insurans Am Malaysia (PIAM) Motor Tariff in the table below.| Insurance Period | Private Vehicle | Commercial Vehicle |
|---|---|---|
| First-year | 0% | 0% |
| Second-year | 25% | 15% |
| Third-year | 30% | 20% |
| Fourth-year | 38.33% | 25% |
| Fifth-year | 45% | 25% |
| After the fifth-year | 55% | 25% |
Let us give you an example of how NCD works.
So, you bought a new car and the insurance premium for that is RM1,100 - do know that you’re not entitled to any discount for the first year. Okay, so after 4 years of using the car and with no claims made, your NCD rate is now at 38.33%. That means that you’ll only need to pay RM678.37 after the discount the next time you renew - jimat RM421.63!
Okay, now how do you transfer your NCD?
Luckily, the process isn't that complicated.
P/s: You can’t transfer your NCD if you're planning to change it to other people or another type of vehicle (private to commercial vehicle). You also can't have another third-party to request the transfer process.
1. Prepare all the documents needed & some extra money
The basic document that you'll need to bring is your identification card (IC). Some would need you to bring your bank information which it’s not always the case. You might also need to prepare some monies just in case you need to pay the remaining balance of your premium insurance. Whether you pay via cash or online, it's basically up to how you usually deal with your insurer.
To be safe, better call your insurer first and ask about it. That way, you can prepare whatever is needed. Alternatively, you can also contact PIAM.
2. Fill up the form (if your insurance still active)
You guys can go to the insurance branch office or your insurance agent to fill-up the form. Once it's approved, you'll get to keep the copy for your safekeeping.
On another note, if your insurance HAS EXPIRED, you'll just need to bring the number of your previous cover note. Here’s an extra tip, it's also recommended to keep the insurance cover note that has the highest NCD rate on them (can show as evidence as well) to get better discounts.
3. Check your new NCD rate
Once you've got it done, you can check your new NCD rate at MyCarInfo. This is just to be sure that your information is updated.
But, what would happen if you didn’t transfer your NCD?
Well, one thing for sure is that you clearly wouldn’t be able to enjoy discounts that you’ve accumulated with your new insurer/car. Why spend more money when you can spend less, right?
Let’s say you’ve decided to change to a new insurer. The premium that you’re supposed to be paying is RM1,500. But, since your NCD rate from the previous insurer is at 45% and transfer it over to the new ones, you’ll only be paying RM825 (save RM675). Kaching!
That’s how smart consumer roll, people.
Anyway, to those who are thinking about switching to a new insurer, get your car insurance/motorcycle insurance quotation by clicking on the image below.
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