NCD (No Claim Discount) is one of the most valuable things attached to your car insurance policy — yet many Malaysian drivers don't fully understand how it works.
What is NCD?
NCD is a discount on your car insurance premium that accumulates each year you don't make an insurance claim. In Malaysia, NCD rates are standardised by Bank Negara Malaysia (BNM) and are the same across all insurance companies.
NCD Rates in Malaysia
| Years Without Claim | NCD Rate |
|---|---|
| 1 year | 25% |
| 2 years | 30% |
| 3 years | 38.33% |
| 4 years | 45% |
| 5 years and above | 55% |
At maximum NCD, you're paying almost half the insurance premium of a driver with no NCD. On a RM1,500 policy, that's RM825 in savings per year.
What Happens When You Make a Claim?
If you make a claim, your NCD drops back to 0% for the following year's renewal. If your NCD was at 55%, you could lose RM825+ in savings — which is why many people pay for small repairs out of pocket rather than claiming insurance.
NCD Belongs to You, Not the Car
A common misconception: NCD belongs to the driver (policyholder), not the vehicle. If you sell your car and buy a new one, you keep your NCD. However, if you transfer the car to someone else, they don't get your NCD — it stays with you.
How to Protect Your NCD
- Think carefully before claiming for small damage — compare repair cost vs NCD loss
- Consider adding NCD Protection Add-On to your policy (some insurers offer this)
- Always drive carefully and defensively