Car Insurance No-Claim Discount Protector – Is It Worth The Money?

no-claim discount protector singapore

When it comes to driving on the road in Singapore, I’m extra kiasu. I signal a whole 5 seconds before I change lanes, even when there are no cars behind me. I drive 10 km/h below the road’s speed limit. I keep a four car distance from the next vehicle in front of me. I’m not a bad driver. I’m just kiasu. Maybe even abit kiasee.

When accidents happen, one of the biggest complaints Singaporeans have about claiming on their car insurance is the worry that they’ll lose their No Claim Discount (NCD). There’s always this big whine about how the repairs are not worth claiming on and losing the discount, so they end up paying cash. And complaining about it all the way to the ATM.

If you haven’t heard about NCD protectors, read on.


Wait, wait, first things first. What is a No-Claim Discount?

Whenever you buy car insurance, the insurance company asks you more personal questions than a blind date. How long have you been driving? What model of car do you have? How many accidents have you been in? Then, when they’ve received all this information from you, they decide how much your premium is, based on how likely it is that you’ll get into an accident. After that, they secretly make animal sacrifices to the car insurance deities in the hope that you don’t get into any trouble. Didn’t know that? Well, there are quite a number of things Singaporean drivers should know about car insurance.

A No-Claim Discount means the prayers of your car insurance provider have been answered. They got to take your premiums and never needed to pay a cent because you didn’t get into any accidents. They’re so happy for taking your money that they’ll actually give you a discount for your next car insurance premium. How nice of them.

This table shows how No-Claim Discounts are calculated for all car insurance providers in Singapore.

Private car policies Commercial vehicle and motorcycle policies
Period of insurance with no claim Discount on renewal Period of insurance with no claim Discount on renewal
1 year 10% 1 year 10%
2 years 20% 2 years 15%
3 years 30% 3 years or longer 20%
4 years 40%
5 years or longer 50%


So basically, if you drive a private car and you’ve been accident-free for 5 years or more, you only pay half your car insurance premium. The car insurance company is “rewarding” you for your safety record on the road. Of course, it also means that the car insurance company has been taking your money and laughing all the way to the bank for years.


What happens if you do get into an accident and make a claim?

If you’re 100% not responsible for the accident, and if the other vehicle is identified, your No-Claim Discount might not be affected if you make a claim. However, most of the time, making a claim will affect your No-Claim Discount. Your No-Claim Discount will drop by 30% after your first claim. So, if you had gone 5 years without claiming, your No-Claim Discount will be 50%. Claim once and it’ll become 20%. Claim again in the same year and your No-Claim Discount drops to zero.


So what is a No-Claim Discount Protector?

If you find yourself in a tiny fender-bender accident and make a claim, paying for the No-Claim Discount Protector protects you from losing your discount your existing NCD will come out of it unscathed. No-Claim Discount Protectors generally only apply to the first claim within a year though. Also, you will usually only be eligible for the No-Claim Discount Protection if you have a No-Claim Discount of 50%.


So is it worth paying for the No-Claim Discount Protector?

For illustration purposes, let’s put in some numbers and see if the extra cost is worth it. You have not made a claim for 5 years and therefore earned your 50% No-Claim Discount. Your original car insurance premium is $2000 a year, but because of your safety record, you only pay $1000.

Since you’re now eligible for it, the No-Claim Discount Protector offered to you is 10% of your premium. That’s going to cost you an extra $100 a year. Here are the two possible scenarios if you get into an accident, your first one after 5 years, and claim.


Scenario 1: You didn’t take up the No-Claim Discount Protector and save $100.

Your No-Claim Discount will drop to 20%. Even if your premium doesn’t increase (and it will!) you will already be paying $1600 in the following year. You will be paying $600 more.


Scenario 2: You take up the No-Claim Discount Protector and spend $100.

Your No-Claim Discount will not drop. Assuming your premium doesn’t increase (although it definitely will!) you will continue to pay $1000 in the following year. You only spend $100.

Therefore, buying the No-Claim Discount Protector essentially saves you $500, if you get in an accident and claim.


What’s the catch?

There may be terms and conditions associated with getting a No-Claim Discount Protector. For example, you may not be allowed to switch insurers for a few years. Also, there’s nothing to stop the insurance company from increasing your car insurance premium amounts anyway. Because of the reasons above, always make sure you have the best car insurance you can find, before you commit to an insurer for at least 5 years.


Do you have any regrets about having or not having paid for a No-Claim Discount Protector? Share your stories with us.