Right here at INO, we obtain inquiries in regards to the No Claims Low cost (NCD) / No Claims Bonus (NCB) day by day. Certainly, it’s one of the vital widespread insurance coverage advantages for drivers. Nevertheless, behind the seemingly self-explanatory title, there are some finer particulars that even skilled drivers may not concentrate on.
On this publish, we are going to spell out how the No Claims Low cost works and a few vital, associated information so that you can get a clearer image on the topic.
Definition of No Claims Low cost (NCD)
NCDs, aka No Claims Reductions, is a premium low cost supplied to policyholders for yearly of driving claims-free. Initially often called No Claims Bonus (NCB), the title was subsequently modified to replicate its nature clearer – it doesn’t give the policyholder any extra cash, however fairly reduces their premium the next yr.
For automobile insurance coverage in Hong Kong
In Hong Kong, the NCD often takes on an growing share scale. Though low cost charges differ amongst completely different insurers, most suppliers provide a cap of 60% off the policyholder’s annual premium.
Under is a typical instance of how NCDs are utilized to automobile insurance coverage premiums in Hong Kong:
1 yr of claims-free driving: 20% NCD
2 years of claims-free driving: 30% NCD
3 years of claims-free driving: 40% NCD
4 years of claims-free driving: 50% NCD
5 years of claims-free driving: 60% NCD
For business motor insurance coverage
In distinction with particular person motor insurance coverage, autos used for work or business functions are calculated in another way, with the utmost low cost being 30%. Right here’s an instance of how NCDs are usually utilized to business motor insurance coverage premiums in Hong Kong:
1 yr of claims-free driving: 10% NCD
2 years of claims-free driving: 20% NCD
3 years of claims-free driving: 30% NCD
Vital information in regards to the No Claims Low cost
NCDs are transferable below particular circumstances
Transferring from an area insurer
NCDs are widespread advantages supplied by just about all motor insurers in Hong Kong. As such, while you swap from one supplier to a different, you possibly can usually get pleasure from the identical NCD. All you need to do is present proof that you’re eligible to this low cost with the present supplier – it might probably both be within the type of a written affirmation, or said within the coverage doc. Simply be sure that your NCD and the size of claims-free interval are clearly said.
Transferring from an abroad insurer
For newly arrived expats, the method of transferring NCDs is kind of the identical. To get pleasure from the identical NCD with a brand new insurer, it’s worthwhile to receive a certificates of insurance coverage out of your earlier insurer to confirm that you just didn’t make any claims over the past 12 months.
Transferring from business to non-public autos
You possibly can switch the NCD out of your firm automobile to your non-public automobile. To do that, you need to receive a letter of consent for NCD transferal out of your employer or approved consultant.
Transferring between automobile varieties
NCDs usually are not transferable while you swap between completely different automobile varieties. For instance, for those who commerce in your van for a bike, your NCD can be reset to 0%.
Transferring between autos below your title
Should you personal a number of autos, you’ll have a No Claims report for every of them, and it’s doable to switch your No Claims Low cost from one automobile to a different.
Transferring between autos below completely different names
Should you’re promoting your automobile, the NCD will stick with you and the client received’t be entitled to your NCD.
Transferring as a named driver
Should you’re driving solely behind the wheel of a company-owned automobile, or are a named driver of one other insurance coverage coverage, you received’t be capable of construct up any No Claims report within the first place so there’s no NCD that you would be able to switch.
NCD Safety
Some insurers present NCD safety which could be added to your plan (at a value). On this manner, even when it’s worthwhile to make a declare after an accident, you’ll nonetheless be entitled to your authentic No Claims Low cost at renewal. Nevertheless, it’s price noting that any such safety has its harm threshold. Provided that the harm assessed doesn’t exceed the brink will you be allowed to make use of the safety. Moreover, NCD safety can’t be transferred to a different insurer.
NCD step-back system
Most motor insurers deal with the No Claims Low cost as a step-down scheme, which signifies that your low cost received’t be eradicated with a single declare. As a substitute, your NCD can be lowered everytime you lodge a declare. For example, if a driver with a 50% NCD (representing 4 years of claim-free driving) submits a declare, he/she’s going to solely be eligible to a 20% NCD once they renew their coverage, no matter whether or not he/she is at fault for the incident.
As well as, this ‘step again’ system is just relevant to non-public autos. Different sorts of autos will lose their NCD totally at renewal upon a single declare.
NCDs can expire
Relying on the insurer, NCDs will expire 12/24 months after the cancellation or finish of a coverage. Should you promote your automobile and don’t switch the NCD over to your new coverage, the insurer will void your NCD.
Claiming is optionally available
Though you need to report back to your insurer for all accidents inside 24 hours, whether or not to say the prices in opposition to your insurance coverage is totally as much as you. Some drivers will weigh settling the prices privately and shedding the No Claims Low cost with the intention to save extra money. This may be the best choice in case you have a excessive NCD, as it can imply that you just will not need to forego your large premium low cost for the restore prices of minor property harm.
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