No Claims Discount: What you need to know | Finder Singapore
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No Claims Discount

Can your discount help you get cheap car insurance? Should you think about buying a NCD protector? Let's take a look.

Making an insurance claim is sometimes necessary to cover the costs of damages or injuries after an accident. But did you know that the longer you go without making a claim, the more likely it becomes that you’re eligible for discounts on your insurance costs?

Read on to find out how these kinds of discounts work, and how you can use them to get the best value on your car insurance.

How does a no-claims discount work?

Each year you hold car insurance and don’t make a claim, you might become eligible for a discount. A no-claims discount (NCD) is sometimes referred to by insurers as a no-claims discount.

Generally, your discount won’t be reduced for claims where you were not at fault. This means you can still make weather-related claims or accident claims where the other driver was clearly at fault without losing your no-claims discount.

The exact types of claims you can make without losing your discount will be different depending on the insurer, so it’s a good idea to look at this if you’re planning on building a no-claims discount up over a number of years.

When you switch car insurance, it’s also worth looking at whether your new insurer will recognise your no-claims discount and clean driving record.

What kinds of claim-free discounts are there?

Generally, if you’ve managed to go five or more years without making a claim, you could save up to around 50%-60%, depending on your insurance provider. These savings can vary each year too, but even having just one years’ no-claims discount could shave off up to 30% in the following year.

Because discount types and terms vary between providers, we’ve outlined a couple of different ways you can get a discount for keeping your claims to a minimum.

Experienced or safe driver discount

With this kind of discount, you’ll get a rate break as long as you’re not involved in any accidents.

This kind of discount also allows for claims not related to safe driving, such as theft, vandalism or inclement weather damage like hail and lightning, without affecting your eligibility for a safe driver discount.

No claim discount or no-claim bonus

Some companies will give you a discount off your premiums if you maintain your policy with no accidents or claims for, say, five years. This is the most direct kind of claim-free discount, but it also takes multiple years of safe driving and unbroken cover with the same insurer to qualify.

Not all kinds of discounts are available everywhere in Singapore. To find out if one of these discounts is available to you, contact your provider, or include these discounts in your must-have list when you’re shopping for a new policy.

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The challenge with no-claims discounts

The key to finding cheap car insurance is to shop around, and take your business elsewhere if you find a better deal. A no-claims discount can get in the way of this. If you’ve worked hard to grow your discount, then you might find it harder to switch to an insurer that will recognise your discount the same way. This means your insurance options are a lot more limited.

If you can find better value elsewhere, then a no-claims discount might be holding you back and actually leading to higher premiums than what you could get by shopping around. Either way, it pays to know what your options are and what other deals are out there.

Is it worth buying a NCD Protector?

A NCD Protector is an extra-cost option you can add to your coverage. It works differently depending on the insurer, but generally, it will let you make up to two claims without losing your no-claims discount.

Your insurer will typically offer a NCD Protector once you’ve been with them for at least two years without a claim.

Whether you choose to get it is entirely up to you, but you should note the following:

  • This feature simply protects your discount, and your premiums are still going to increase following a claim.
  • It makes your car insurance more expensive since you are paying to keep a discount. Learn about how to reduce the cost of your car cover.
  • It might only be available if you choose to stick with the same insurer for a while.

Like the no-claims discount itself, this feature encourages people to stick with the same insurer rather than shop around. For a fairer comparison, you might want to factor this into the prices when you’re comparing car insurance quotes.

If protecting your no-claims discount means you’re paying more for car insurance than you would with a provider that doesn’t offer this discount at all, then it might be time to make a switch.

Pros and cons of using a no-claims discount

Pros

  • You could get a significant discount
  • Can be protected with various coverage options
  • Will not necessarily be lost if you have to make a non-fault claim

Cons

  • Might prevent you from effectively shopping around or accessing other discounts
  • NCD Protector options come at an extra cost
  • Policies that feature a no-claims discount are not necessarily the most cost-effective options
  • You lose your no-claims discount after going for an extended time without car insurance

Bottom line

If you’re a safe driver who’s had no claims or accidents in years, you deserve to save money on your premiums. But when it comes to discounts for staying claim-free, not all providers are created equal — and by comparing the discounts of several insurance companies, you could find a truly great value on your coverage.

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Frequently asked questions

How much can I save with a no-claims discount?

It works differently depending on the insurer and is affected by a range of circumstances. If you have a no-claims discount, you may be able to find out the extent of the discount by contacting your insurer.

How do you get proof of your no-claims discount?

Your current or previous insurer will be able to provide a statement highlighting your no-claims rating. When you switch car insurance, your old insurer can pass this along to the new insurer.

I haven’t made any claims in years. Should I expect a no-claims discount if I switch to a new provider?

This depends on the insurer. This is an instance where the benefits of your current insurance provider, so long as there are benefits and discounts for remaining claim-free for years, can outweigh the benefits of switching to a new insurance company with a much better premium.

Consider what you’re saving now or what you stand to save in the next year by staying with your insurer, and compare that amount to what you might save with a different provider.

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