5 Renewal Mistakes That Could Cost You Your NCD in Malaysia
Your No Claim Discount (NCD) can take years to build, but the wrong move during car insurance renewal can wipe it out instantly.
For Malaysian drivers, protecting your NCD is one of the most important ways to keep renewal costs low. Below are the most common car insurance renewal mistakes — and how to avoid losing your hard-earned discount.
The "Gold Medal" of Car Insurance: 55% NCD
Reaching a 55% NCD is the ultimate goal for drivers in Malaysia because it can reduce your insurance base premium by more than half.
How To Reach 55% NCD
To qualify for the maximum NCD rate, you must:
Drive for five consecutive years without making an at-fault claim
Maintain continuous claim-free renewals
NCD Progression in Malaysia
Your discount increases every year you remain claim-free:
1st year: 25%
2nd year: 30%
3rd year: 38.33%
4th year: 45%
5th year and above: 55%
Planning to renew soon? Comparing available offers and policy benefits can help you maximise value while protecting your NCD.
Common Mistakes That Can Reduce or Reset Your NCD
Making Small Claims
Making a claim for a small scratch or minor dent may not be financially worthwhile, as it can instantly reset your NCD even if the repair cost is relatively low. Losing five years of accumulated discounts can cost more in the long run than paying for minor repairs yourself.
Before filing an insurance claim, consider whether the repair costs outweigh the potential increase in your premium.
Letting Your Insurance Expire
Allowing your policy to lapse can cause coverage interruptions and additional administrative requirements when reinstating your insurance.
If your policy lapses for 12 months, your NCD will drop one tier progressively. For example, 55% NCD drops to 45%, 45% drops to 38.33%, etc.
Busy drivers are encouraged to set a reminder at least 30 days before their policy expires so they have ample time to compare quotations and coverage from different insurers and choose the one that best suits their vehicle’s needs.
Not Transferring NCD When Changing Cars
If you sell your car and purchase another vehicle under your own name, your NCD can usually be transferred. Failing to transfer it may cause you to miss out on the discount for your new vehicle.
Choosing the Wrong Coverage
Some car owners switch to cheaper insurance coverage to save money without fully understanding the gaps in protection. This can lead to higher out-of-pocket costs if an accident occurs.
To avoid this risk, compare coverage benefits carefully instead of focusing solely on price.
Not Declaring Accurate Information
Failing to declare additional named drivers or provide accurate usage details in your policy can lead to claim issues. Insurers can reject your claim in the future if the information provided is incomplete or inaccurate.
Therefore, drivers should ensure that all policy details are updated before renewal.
Smart Car Insurance Renewal Strategy
The goal is not just renewing early — it is renewing at the right time.
The best-value car insurance renewals often combine:
Your existing NCD savings
Limited-time promo discounts
Combining these benefits can help you achieve the lowest overall renewal cost while protecting your hard-earned NCD.
Don’t miss out — get your quotation instantly with us today.
Frequently Asked Questions
What is NCD (No Claim Discount) and how does it work?
No-Claim Discount (NCD) is a discount on your car insurance premium that rewards you for not making any claims during the policy year. The longer you go without making a claim, the bigger your discount.
You can check your current NCD via MyCarInfo using your IC and car plate number.
What happens to my NCD if I make a claim?
If you make a claim on your car insurance, your NCD will reset to 0% at your next renewal. If you are not at fault in an accident, you can get a claim from third-party to protect your NCD.
Can I transfer my NCD to a new car?
Yes. If you sell your car and buy a new one, you can transfer your NCD to the new vehicle. If you own multiple cars, each car will have separate NCD as it cannot be shared between two vehicles at the same time.
To transfer your NCD, inform PolicyStreet or your insurer when renewing your policy for the new vehicle.
