Every vehicle owner requires mandatory motor insurance, and there are many ways to look out for to save on your premium. One of which can help reduce your premium price is something called the No-Claims Discount (NCD). Here are some things you should know about your NCD.
What exactly is NCD?
NCD is an annual award by your insurer to show recognition for being a careful driver if you did not make any claim for a year or more on your existing car insurance policy. It can help reduce the premium you have to pay for the following year.
You’ll earn a 10% discount on each policy term and each policy term last for 12 months. With that said, if you were to terminate your car insurance before 12 months, you will not receive the NCD you were set to earn by the end of the policy term.
How to get NCD?
To earn NCD, you must not make any claims against your car insurance for a year. For every year without any claims made, you will earn a 10% discount, which will be capped at 50% for private cars. Therefore, if you maintain a clean record of claims for five years, you will get a 50% NCD.
NCD applies to drivers, not the vehicle!
If you were to sell and buy another car, you will retain your NCD for the new car. However, if you decide to get an additional car, the NCD for the second car will be 0%.
At any point in time, when there is a break in ownership of the vehicle, your insurer is most likely to allow you to keep your NCD for up to 24 months. Depending on the insurer, some might only allow you to keep it for 12 months. Contact your insurer if you wish to find out more!
Can NCD be transferred to someone else?
Your NCD cannot be transferred to another person unless he or she is your spouse or immediate family member. Please note that the transfer is non-reversible.
But in most cases, you’ll have to be insured by the same company, and such a transfer is subject to appeal.
Will you lose your NCD if you make a claim?
You will only lose your NCD in a claim that is proven to be your fault. If you are at fault in a claim, it does not necessarily mean that you will lose all your NCD at once. Insurers will most likely take away 30% off your hard-earned NCD upon a claim.
However, there are ways to protect your NCD in the event of a claim! See the next point.
How to protect my NCD?
You can choose to purchase an NCD protector which allows you to make a claim without losing your NCD. Some insurance company also allows a second claim during the policy term.
The red flag is that if you were to change to another insurer, you might lose 30% or all of your NCD.
Will private settlement affect your NCD?
Your NCD will not be affected so long as you do not make any claims against your insurance policy. Keep in mind that you will still have to make an insurance report, despite settling privately. If you do not make an accident report within 24 hours, insurance companies may impose a penalty on your NCD.
Now that you know how NCD works, talk to your insurance company and find out more! It will be wise for you to compare when it comes to insurance! UDRIVERS can help you source for a cheaper renewal motor insurance premium so if you need a quote for your motor insurance, please feel free to call 88690022 or email us at firstname.lastname@example.org