No Claims Low cost (NCD) Protector: Ought to You Purchase This Auto Insurance Driver? – AsiaOne
A No Claims Discount Protector can help you maintain careful driving for years so you can continue to save up to several hundred dollars a year.
Car insurance is compulsory and can be quite expensive too. No-claims discounts are therefore a godsend and help responsible, accident-free drivers save part of their car insurance premiums.
But even the most cautious and conscientious driver is human and therefore prone to slip up. An accident can reduce your no-claims bonus to zero and wipe out all of your years of careful driving in no time.
Well, you can prevent this from happening to some extent if you have an NCD protector.
What is discount protection without claims?
As the name suggests, a No Claims Discount Protector protects your No Claims Discount.
But what is a no-claims discount?
No damage discounts, explained
A No Claims Discount (NCD, sometimes also known as a No Claims Bonus) is a type of reward system that promotes safe driving through economic incentives.
Drivers receive a discount on their car insurance premiums for every year of accident-free driving. Every year, if you are on the road without incident, you will receive an increasing discount that varies for private cars, company vehicles and motorcycles.
This discount is applied when you renew your car insurance for the next insurance year.
See the table below for an illustration:
|Cumulative NCD||Private car||Company vehicles and motorcycles|
|Year 1||10 percent||10 percent|
|Year 2||20 percent||15 percent|
|Year 3||30 percent||20 percent|
|Year 4||40 percent||-n / A-|
|Year 5||50 percent||-n / A-|
Private car drivers can accumulate up to 50 percent NCD over five years. Meanwhile, motorcyclists and company vehicles can only stack up to 20 percent NCD within three years.
Either way, it's a good idea to get the most of your NCD as it can save you money on your auto insurance – up to several hundred dollars a year for private drivers!
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Ok, what if i have an accident?
If you are involved in a traffic accident in which you are deemed to be “culpable”, your NCD entitlement will be reduced as follows:
|Current NCD||1 "fault claim"||2 or more "fault claims"|
|50 percent||20 percent||0 percent|
|40 percent||10 percent||0 percent|
|30 percent or less||0 percent||0 percent|
Ricky, for example, who rushes home after a night, breaks the speed limit and the car pulls up in front of him.
His current NCD is 50 percent. Since this is his first “fault accident” of the year, his NCD drops to 20 percent.
If he makes another claim for damages within the same year, his NCD drops to 0 percent.
Since your current NCD will apply the next time you renew, Ricky will have to pay full price when he renews his auto insurance for the next year.
If Ricky had only had one accident instead of two, he would have received a 20 percent discount on the next year's premium.
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Can I prevent my NCD from being lost?
The answer is yes.
You can do this by buying a – you guessed it – NCD protector. Let's see how this tab works in the next section.
How does a No Claims Discount Protector work?
An NCD protector prevents you from losing the NCD you have built up in the first "fault accident" of your insurance year.
Think of it as a "one-hit" sign that is only good for this insurance year. You cannot accumulate NCD protectors from previous years.
This means that if there are two or more accidents at fault within the insurance year, the usual penalties are due.
Here is an illustration:
|Current NCD||1 claim for damages (with NCD protection)||2 "error" claims (with NCD protector)||3 or more "fault claims" (with NCD protector)|
|50 percent||50 percent||20 percent||0 percent|
|40 percent||40 percent||10 percent||0 percent|
|30 percent or less||30 percent||0 percent||0 percent|
In this way, an NCD Protector can act as insurance for your car insurance.
How do I buy a No Claims Discount Protector and how much does it cost?
You can purchase an NCD Protector from your auto insurance provider as a passenger that is attached to your main auto insurance policy.
In most cases, an NCD protector is automatically included if you switch to another car insurer while wearing an existing NCD.
As for cost, the online listings we created while researching this article don't include a breakdown of the items so we can't tell you for sure.
However, online sources suggest that NCD protectors are typically around 10 percent of your insurance premium.
Check with your preferred insurer for an exact number.
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What else do I need to know about my NCD Protector?
Some providers charge a certain amount of NCD
Let's say you've been driving an accident-free car for a year and have earned an NCD of 10 percent. You may want to complete this protection with an NCD protector.
However, some insurers only offer NCD Protector to drivers with a certain NCD level, say 30 percent or more. Therefore, you may not be able to get an NCD protector to begin with.
Not all claims will affect your NCD and NCD Protector
If you need to have your windshield or windows repaired or replaced, don't worry about damaging your NCD or NCD protector. Such repairs are usually not counted and should not affect your current NCD.
The same applies if you are not entirely responsible for the accident you are claiming. In this case your NCD will be preserved and your NCD Protector will not be activated.
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NCD authorization is not transferable between drivers
You cannot transfer your NCD entitlement to another driver.
However, you can usually transfer your NCD when you switch cars.
When you buy a second car, your insurer gives you a choice of which of the two cars will continue to benefit from the NCD you have accumulated.
This means that you will need to build up your NCD eligibility for the other car over time.
Who Should Get a No Claims Discount Protector Driver?
Basically everyone who drives a car.
Think about it, nobody wants to be involved in an accident, so every driver or passenger out there is already anxious to drive as safely as possible.
So why not be rewarded for something you are already doing? Plus, driving a car in Singapore is already expensive enough that there is no point in missing out on the opportunity to save a few hundred dollars.