Car Insurance Guide
NCD Explained: Your Complete Guide 2026
Everything you need to know about No Claim Discount in Malaysia - how it works, current rates, and how to maximize your savings.
How do I transfer NCD when buying a new car in Malaysia?
Get NCD confirmation letter from current insurer, submit to new insurer before old policy expires. NCD stays with the PERSON, not car. 55% NCD saves ~RM1,100/year on RM2,000 premium. Transfer takes 1-3 days same insurer, 3-7 days different insurers. Don't let it lapse.
Updated 2026 • Malaysia
Malaysia NCD Rates (2026)
| Claim-Free Years | NCD Rate | Savings Example* |
|---|---|---|
| First policy or after a claim | 0% | RM 1,500 (save RM 0) |
| 1 year claim-free | 25% | RM 1,125 (save RM 375) |
| 2 years claim-free | 30% | RM 1,050 (save RM 450) |
| 3 years claim-free | 38.33% | RM 925 (save RM 575) |
| 4 years claim-free | 45% | RM 825 (save RM 675) |
| 5+ years claim-free (maximum) | 55%(Maximum) | RM 675 (save RM 825) |
* Based on a base premium of RM1,500
What is NCD (No Claim Discount)?
No Claim Discount (NCD) is a reward system used by car insurance companies in Malaysia to incentivize safe driving. Simply put, the longer you go without making a claim, the bigger discount you get on your premium.
NCD is also sometimes called No Claims Bonus (NCB). In Malaysia, it's regulated by Bank Negara Malaysia (BNM), which sets the standard discount rates that all insurers must follow.
How NCD is Calculated
Your NCD discount is applied to your base premium (before add-ons and service tax). Here's how it works:
Example Calculation
What Happens When You Make a Claim
When you make a claim, your NCD is affected based on how many claims you've made:
First claim
NCD drops by 2 levels (e.g., 55% drops to 38.33%)
Second claim in same year
NCD drops to 0%
After NCD resets
You start building it up again from 0%
Types of Claims That Affect NCD
Claims That Reduce NCD
- ✗Own damage claims (accidents)
- ✗Theft claims
- ✗Fire damage claims
- ✗Third party claims (your fault)
Usually Don't Affect NCD
- ✓Windscreen claims (if separate)
- ✓Third party claims (not your fault)
- ✓Some special perils claims
How to Protect Your NCD
NCD Protection Add-on
Some insurers offer NCD protection as an add-on. This allows you to make one claim per year without losing your NCD. Consider this if:
- •You have high NCD (45% or 55%)
- •The cost is reasonable compared to potential NCD loss
- •You drive frequently and want peace of mind
Consider Small Claims Carefully
Before making a claim, calculate whether it's worth it:
- •Compare the repair cost to your excess (deductible)
- •Calculate how much your NCD is worth over the next few years
- •For minor damage, paying out of pocket may be cheaper long-term
Separate Windscreen Coverage
Add windscreen coverage as a separate add-on. This way, if you need to replace a cracked windscreen, it won't affect your NCD.
Transferring Your NCD
When Buying a New Car
- ✓Request an NCD confirmation letter from your current insurer
- ✓Provide this letter to your new insurer
- ✓Your NCD will be applied to your new policy
Your NCD is tied to you, not your car.
When Switching Insurers
- ✓Wait until your current policy expires (don't cancel early)
- ✓Request NCD confirmation from your current insurer
- ✓Apply with your new insurer with the NCD letter
You can take your NCD to any insurer.
NCD Validity Period
NCD for Multiple Cars
Tips to Maximize Your NCD Savings
Drive safely
The best way to maintain your NCD is to avoid accidents
Pay small repairs yourself
Don't claim for minor damage
Get windscreen coverage
Protect your NCD from chip claims
Consider NCD protection
Especially if you have 55% NCD
Don't let policy lapse
Renew before expiry to maintain NCD
Compare insurers
Your NCD is portable, so shop around
NCD Explained FAQ
It takes 5 years of claim-free driving to reach the maximum NCD of 55%. You start at 0% and progress through 25%, 30%, 38.33%, 45%, and finally 55%.
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