One of the costs of driving in Singapore is mandatory car insurance. Depending on how safe a driver you are, this can be around $200, or as high as $500 (yes, it can get that high, usually for road users who think signalling and stop signs are just fun suggestions). One of the main factors that determine those premiums is your No Claim Discount (NCD).
The NCD is a discount you get on your private car insurance premiums (not commercial vehicles or motorcycles) if you don’t make any claims for a given year. The more consecutive years you go without making a claim, the bigger the discount gets:
The maximum NCD by AXA is 50 per cent. The discount always applies upon renewal of your insurance policy.
Your NCD will be reduced by a certain percentage, after the first claim:
A second or further claim in the same year will reset your NCD to zero.
There is a way to preserve your NCD though, through an optional NCD protector. When you use AXA SmartDrive, you can reduce the loss of your NCD after making a claim.
For example, if you have an NCD of 50 per cent and make a claim, your NCD won’t be reduced at all. If you make two claims in the year, and your NCD is 50 per cent, it will only be reduced to 20 per cent instead of zero. You can see the full details here.
It makes sense to buy an NCD protector, as it takes a long time to rebuild your NCD after a claim.
Then you may not lose your NCD.
Insurers will use the Barometer of Liability Assessment (BOLA) to determine the extent to which the accident is your fault.
For example, if your car was hit in a parking lot, then you probably have zero per cent fault (unless you were parked illegally). If you rear-ended someone else, however, it’s quite likely you’ll be considered more than 50 per cent at fault. If your overall responsibility is 20 per cent or less, you won’t lose your NCD.
If you don’t report an accident to your insurer within the usual time limit* - and the third Party reports the accident and submits a claim against AXA, your NCD can be reduced. Then you’d suffer a double whammy: you’d have paid in cash for the repairs, and still lost your NCD. That’s why it’s better to be honest.
*Within 24 hours, or by the next working day if it’s a public holiday or weekend.
Your NCD applies to you, not your car. You can transfer it if you switch to ONE other vehicle. But you can’t have your NCD apply to three or four different vehicles at once.
Also, note that you don’t get to apply your NCD just by being a named driver on someone else’s policy (e.g. your spouse’s car insurance).
Your insurer may let your transfer your NCD to your spouse once, but there’s no way to transfer it to anyone else (contact your insurer for more details).
NCD can be transferred between insurers. Do note: if you have an NCD protector and you make a claim for an incident which is your fault, NCD will remain as it is for one claim. However if your NCD is being transferred to another insurer, they may not allow the same NCD sale as the protector applies to the original insurer only.
This is why it’s important to pick a good policy the first time around. Check out AXA SmartDrive which allows you to pick the right level of coverage to fit your individual and family needs.
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