Car Insurance in Singapore | Is NCD protection worth it?


It is impossible to predict when accidents may occur on the road, but when they do occur, auto insurance protects us from financial strain. By law, all cars in Singapore must be insured. The market is full of many car insurance options, from the type of coverage to the various add-ons you can pay for.

Spoiled for choice, you might find it hard to figure out if you need the various additional features that are supposed to protect your wallets. Amidst these add-on options, such as personal accident insurance, you will come across protection with no claim reduction.

Before you decide to pay a premium for it, here’s a guide to help you figure out if you really need it.

No Claim Reduction Protection Explained

Before you understand what Non-Claim Discount Protection is, you need to know what Non-Claim Discount (NCD) is and how it works.

What is a claim-free discount?

NCD is granted to motorists if no claims have been made under their auto insurance policy for a year or more with the existing insurer. As a result, motorists can save even more money as it reduces the price of premiums motorists have to pay for each annual renewal of their insurance.

The table below illustrates how NCD is applied in the private motor insurance industry in Singapore.

Claim-free period Discount on each annual renewal
1 year ten%
2 years 20%
3 years 30%
4 years 40%
5 years or more 50%

That said, in cases where only a claim for repair or replacement of the windshield or window is made or your car is not “at fault” for the accident, your NCD will not be affected.

What is claim discount protection?

A non-claim reduction protection essentially protects your NCD by allowing you to make a claim under your policy while enjoying the benefits of the NCD you have carefully built up over the years.

Although the NCD can help drivers save money, as soon as an insurance claim has been made, the NCD goes down. Such a situation can be avoided with NCD Protection.

However, note that there is a limit to the number of claims that can be filed before losing your accumulated NCD over the years. This limit varies from one insurer to another.

How does it protect your NTM?

The chart below illustrates how NCD protections protect passenger car drivers from losing their hard-earned NCD over the years if they file a claim under their auto insurance policy through Budget Direct Insurance .

Current DTM NCD after 1 disaster with NCD Protection NCD after 2 or more claims with NCD Protection
50% 50% 20%
40% 40% ten%
30% 30% 0%
20% or less 0% 0%

While 10% may not seem like a significant amount, auto insurance policies are usually priced in the thousands. So, such protection will save you hundreds of dollars.

Why You Should Pay for Claim-Free Rebate Protection

Signature of the buyer's insurance policy

The table below illustrates the consequences without NTM protection, using the Budget Direct policy as an example.

Illustration of Budget Direct’s Claims Discount Protection
Current DTM NCD after 1 complaint NCD after 2 or more complaints
Without NCD protection With NCD protection Without NCD protection With NCD protection
50% 20% 50% 0% 20%
40% ten% 40% 0% ten%
30% 0% 30% 0% 0%
20% or less 0% 0% 0% 0%

Referring to the table above, for drivers with an existing NCD of 30% or greater, the coverage will retain your existing NCD for your first accident. However, for subsequent claims filed, it would be reduced. On the other hand, without NCD protection, on your first claim, your NCD will drop to a lower percentage, or even zero.

While it may not be able to protect you against your insurer increasing the cost of the NCD protection premium, it is able to protect the NCD you have built over a period of five years, by reducing its decrease. Therefore, such a benefit would outweigh the initial cost of the premium paid for NTMs.

As well as helping drivers save money, NCD protection allows drivers to drive with peace of mind knowing they won’t be at a loss if they have an accident.

Disadvantages of Paying for Claim-Free Rebate Protection

Although NCD Protection has the potential to save your wallet money, it does have its drawbacks.

It may be more expensive in the long run

As a big part of whether buying NCD protection depends on your driving history, buying such a premium can end up costing you more.

For new drivers or drivers who tend to be more accident prone, purchasing NCD protection may in turn make you pay more for your insurance. If you file a claim within the first two years of purchasing the policy, your NCD would not have matured enough to help cover the costs of paying the premium. As such, it’s important to do the necessary math before buying the premiums offered by insurers so that you only pay for the features you need and find the cheapest auto insurance for yourself.

It is non-transferable between insurers

Unlike NCD, NCD protection is not transferable between insurers. As a result, insurance companies often use such a premium to avoid losing customers. As NCD protection will only benefit you in the long term, 3 years being the minimum, it discourages buyers from not renewing or canceling their policies.

Looking for the cheapest insurer offering no-discount protection in the event of a claim?

Customer checking insurance policy details

After learning the various pros and cons of buying NCD Protection, you might be looking for the cheapest car insurance company in Singapore that offers NCD Protection with competitive car insurance quotes.

As such, we have ranked the top three insurers that offer such a premium at competitive prices alongside other premiums such as Personal Accident Premium.

Budget Direct Auto Insurance

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Claiming to be an insurer offering the cheapest customizable car insurance with premiums 40-46% lower than the market average for drivers with 50% NCD, buyers on a tighter budget can consider to choose Budget Direct Car Insurance. In addition to offering competitive rates for their non-communicable disease coverages at $100.43, they also offer a customizable insurance plan with optional add-ons such as personal and medical accident coverage, 24-hour roadside assistance over 24, coverage for modifications and accessories as well as transportation allowance in the event of loss of use.

Singlife with Aviva car insurance

Aviva Lite
Aviva Lite
Consider this if
you want budget plans with optional add-ons
  • Third party damage coverage
  • Coverage in the event of loss/damage to the vehicle

With budget plans that offer premiums around 20-30% below the market average, Aviva’s NCD protection costs $60.74. For those looking for optional add-ons outside of NCD protection, Aviva also offers optional add-ons such as additional personal accident and loss of use.

FWD car insurance

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While FWD Car Insurance tends to favor experienced drivers, they offer competitive pricing for their plans and offer options; covers such as NCD protection and a service choice at any workshop.

Are you looking for the most suitable and cheapest car insurance in Singapore? Save time by using ValueChampion’s car insurance valuation page!


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