How NCD Is Calculated in Malaysia (Simple Explanation)
If you're renewing your car insurance, understanding how NCD is calculated in Malaysia can help you estimate your premium and maximise your savings.
In Malaysia, the No Claim Discount (NCD) rewards safe drivers with lower insurance premiums for every year they remain claim-free.
What Is No Claim Discount (NCD)?
NCD (No Claim Discount) is a percentage discount applied to your base car insurance premium when you do not make any claims during the policy year.
The more claim-free years you accumulate, the higher your NCD percentage becomes.
NCD Rate for Private Cars
This is the standard NCD structure commonly used by insurers in Malaysia:
1st claim-free year: 25%
2nd claim-free year: 30%
3rd claim-free year: 38.33%
4th claim-free year: 45%
5th claim-free year and above: 55%
How Is NCD Calculated?
The formula used to calculate your premium after NCD is:
Premium after NCD = Base Premium × (1 - NCD%)
Example 1: Mid-Level NCD
Base premium: RM1,200
NCD: 30%
Final premium: RM840
Example 2: Maximum NCD
Base premium: RM1,200
NCD: 55%
Final premium: RM540
If you renew during limited-time campaigns like PolicyStreet's ongoing Save Kaw Kaw campaign, you could also stack on extra rewards on top of your NCD savings — think vouchers for things like battery replacement, servicing, dashcam, car tinting, or car rental.
Explore our Terms and Conditions for the full details.
Does Every Insurance Claim Reset NCD?
Not all claims affect your NCD the same way.
At-fault accident claims generally reset your NCD. Meanwhile, theft claims are treated differently depending on the insurer.
Some comprehensive policies may let you make a claim for a stolen vehicle under a comprehensive policy or third party, fire and theft (TPFT) policy, but whether it will reset your NCD or not vary across all insurers, and it can depend on whether your car is recovered or declared a total loss.
Windscreen claims do not affect NCD — but only if you've purchased the windscreen add-on. Without it, a windscreen claim made under your main comprehensive policy is treated as a normal own-damage claim and will reset your NCD.
Why Understanding NCD Matters
Understanding your NCD is important because it directly affects your renewal cost. Benefits of maintaining a high NCD rate include:
Lower annual insurance premiums
Transferable NCD between insurers
Eligibility for NCD protection add-ons
Combining a high NCD with time-based renewal promotions is often one of the best ways to reduce your total insurance cost.
Frequently Asked Questions
1. How can I check my current NCD rate?
You can check your current NCD rate via MyCarInfo — head to the NCD Enquiry section and key in your IC and car plate number.
2. Can I transfer my NCD to another insurer?
Yes. Your NCD is tied to the policyholder and vehicle, not the insurer.
3. Do windscreen claims affect NCD?
No, as long as you have the windscreen add-on. Claims made under this add-on are categorised separately and won't reset your NCD.
4. Does every accident reset NCD?
Depends. If you make a claim for an own-fault damage, your discount will reset to 0% at the next renewal. If you are not at fault, you can recover the claim from the third party, which protects your NCD from being reset.
5. How can I maximise NCD savings?
Avoid making small claims when possible, maintain continuous coverage, and combine high NCD with renewal promotions for better overall savings.
