Frequently Asked Questions - Motor
A No-Claim Discount (‘NCD’) is an incentive given to you if no claim has been made under your policy for a year or more with your current/existing insurer. It reduces the premium you have to pay for the following year. This is your insurer's way of recognising and rewarding you for having been a careful driver. The rate of NCD depends on your type of vehicle (private or commercial/motorcycle) and the period of insurance with no claim.
The following table shows a common method to calculate the rate of NCD.
| Private Car Policies | Period of insurance with no claim | Discount on renewal |
| 1 year | 10% | |
| 2 year | 20% | |
| 3 year | 30% | |
| 4 year | 40% | |
| 5 years or longer | 50% | |
| Commercial Vehicle & Motorcycle Policies | 1 year | 10% |
| 2 year | 15% | |
| 3 years or longer | 20% |
NCD is just one of the factors affecting the premium. Premium quoted by an insurer based on a higher NCD would not necessarily be lower than that quoted by another insurer based on a lower NCD in a competitive market. Consumers are advised to shop around and compare premium rates before buying.
Yes, it is possible. Your claims history is not the only factor your insurer looks at in setting your premium. All insurance, including motor insurance, is about pooling of risks. As such, a pool with high claims experience will have higher premiums. Inflation in labour and material costs could also result in higher claims costs. There are also other risk factors that insurers have to consider in their pricing models in setting your premiums, as explained in question 6.
There are more than 25 motor insurers in Singapore, each with their own pricing models. You are encouraged to shop around for a suitable policy based on your needs.
Most insurers in Singapore adopt a "risk factor rating system" when setting your premium. This means that the premium is based on factors other than the vehicle's value or the price you paid for it.
In general, the following risk factors are considered when setting your premium:
- Vehicle Profile
- Insured/Driver(s) Profile
- What the vehicle will be used for (private use/corporate use/commercial use/hire etc)
- Type of cover
- Claims history
- Insurers may also charge a higher premium when there is an impending claim against you but you could request for a possible refund if it is concluded that you are not liable for the impending claim.
These risk factors will not necessarily have an equal influence on the size of your premium. Your insurer will give each risk factor a weighting based on its range of statistics and past claims information.
You may be entitled to a discount on your premium with a No Claim Discount (NCD). Please refer to section on NCD to find out more.
The insurer needs to know some basic information about you. This is to assist the insurer to better assess the underwriting risk so that proper premiums can be set.
It is important to answer these questions truthfully. Failure to do so may result in your policy being void and your insurer may repudiate any claims against the policy. The following are some frequently asked questions:
- Have you made any recent claims?
- Have you had any recent motor accidents?
- Have you ever received a Traffic Summons or been charged for a driving offence?
- Has your vehicle been modified?
- What will the vehicle be used for?
- How long have you been driving?
- Who will be driving the vehicle?
- Do you have any medical conditions or disabilities that may affect your driving?
Please clarify with your insurer, agent or broker should you have any doubts in answering any questions.
- The premium payable
- The excess (for insured and other drivers - named and unnamed)
- The risks or events covered and period of coverage
- Restriction on drivers (if any)
- Restriction on where repairs could be done
- Non-standard exclusions
- Special accident reporting and claims procedures
- The insurer's cancellation and refund policy
GIA recommends that your insurer provides an executive summary of key contract terms and obligations with your policy. Please make a point of requesting this if your insurer has not provided it. It is important to read your policy as soon as you receive it. This way, you can be sure that there will be no surprises should you need to make a claim.