No Declare Low cost (NCD/NCB) Calculation + FAQs 2025

Drivers or automobile homeowners should have seen the phrases NCD/NCB/No Declare Low cost of their automobile insurance coverage paperwork, however how can they get this premium low cost? What’s the calculation technique behind it? Underneath what circumstances can the no-claim low cost not be prolonged? The specialists at Kuaierbao will provide you with detailed solutions on this particular web page.

No Declare Low cost (NCD/NCB) Defined

Because the title suggests, a no declare low cost implies that when a policyholder has not made any claims for a time frame (measured in years), the insurance coverage firm will present a corresponding share of premium low cost when renewing the coverage subsequent yr, often 20% – 60%.

No Claims Low cost is the total title of No Claims Low cost, which is exclusive to auto insurance and has later been utilized to different insurances, corresponding to health insurance. No Claims Low cost and No Claims Bonus really imply the identical factor, however insurance coverage firms now use “No Claims Low cost” extra usually to spotlight the character of the low cost and keep away from policyholders misunderstanding that the insurance coverage firm will present financial rewards.

As a result of a no claims low cost can considerably cut back the annual premium for auto insurance coverage, policyholders ought to specify the quantity of no claims low cost they’ve when acquiring auto insurance coverage quotes to make sure an correct quote.

How the no declare low cost is calculated

The low cost price for no claims low cost varies from insurance coverage firm to insurance coverage firm, however will increase yearly from 20% to a most of 60%. The calculation technique of the no-claim low cost price for personal automobiles is barely completely different from that for motorcycles and commerical vehicles, which begin at 10% and go as much as 30%.

No Declare Low cost for Personal Automobiles/Bikes/Industrial Automobiles

How will claims cut back the no-claim low cost?

1. 
   

   Your NCD might be reset to zero

   
   if you renew your coverage subsequent yr within the following circumstances:

• Have NCD of 40% or much less and make 1 declare within the coverage yr

• With 50%/60% NCD and a pair of claims within the coverage yr

2. 
   

   Your NCD might be deducted if you renew your coverage subsequent yr within the following conditions:

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• With 50%/60% NCD, when you make one declare through the coverage yr, the insurance coverage firm will deduct a part of the NCD in accordance with the “low cost rebate mechanism”

• 60% no claims low cost turns into 30% if you renew your coverage subsequent yr

• <p50% no claims low cost turns into 20% if you renew your coverage subsequent yr

Please do not forget that the above no-claim low cost “low cost rebate mechanism” often solely applies to personal automobiles. Different varieties of autos will usually lose their no-claim low cost within the following yr if there is just one declare.

Can the No Declare Low cost (NCD/NCB) be transferred?

Switch from native insurance coverage firms

If you wish to change insurance coverage firms, you solely have to buy a brand new coverage inside 12 months after the previous coverage ends or is cancelled and supply related NCD supporting paperwork (such because the previous coverage), and you’ll have the chance to switch your NCD to the brand new insurance coverage firm. Nonetheless, please word that the strategy of calculating NCD is probably not the identical for every insurance coverage firm.

Switch from abroad insurance coverage firms

For foreigners who’ve simply arrived in Hong Kong, the steps for transferring NCD are related. If you wish to take pleasure in the identical NCD with the brand new insurance coverage firm, you will want to acquire a certificates of insurance coverage out of your earlier insurance coverage firm to show that you haven’t made any claims previously twelve months.

Switch from business car to personal car

You possibly can switch your NCD out of your firm automobile to your private automobile. You simply have to acquire a consent letter for NCD switch out of your employer or their authorised consultant.

<h3Go to a unique car kind

Non-transferable NCDs for various classes of autos. For instance, when you promote your truck and purchase a motorbike, your NCD might be reset to 0%.

Switch to a unique car beneath your title

NCD follows folks, not automobiles. In the event you personal a number of automobiles, every may have its personal NCD, and you may switch the NCD from one automobile to a different.

To a car beneath a unique title

NCD follows folks, not automobiles. Even when you promote your automobile to another person, you continue to preserve your NCD and the brand new purchaser is not going to get your NCD.

Switch with a named driver

In the event you primarily drive an organization automobile, or are a named driver on one other coverage, you’ll not have a no claims file in these circumstances and so won’t be able to switch your NCD.

What’s NCD protection?

Some insurance coverage firms will supply No Declare Low cost Cowl (NCD Cowl) so that you can add to your insurance coverage (further cost required). After buying NCD safety, even when it is advisable to make a declare after an accident, you may nonetheless benefit from the authentic NCD. Nonetheless, it’s price noting that such a safety is capped. You possibly can solely use this protection if the assessed declare quantity doesn’t exceed the cap. Additionally, NCD cowl is just not transferable to different insurance coverage firms.

Ought to I declare compensation after an accident?

Though the automobile proprietor ought to notify the insurance coverage firm or middleman and fill out the accident report inside 24 hours of the traffic accident, it’s as much as the automobile proprietor to resolve whether or not to assert compensation from the insurance coverage firm.

Some drivers will weigh the professionals and cons of paying the payment privately or dropping the NCD low cost, relying on which possibility will incur much less loss. This can be a greater method in case your NCD is excessive, as you don’t need to be penny clever and pound silly and lose out on a big premium low cost by paying to restore minor injury.

If the accident doesn’t contain any casualties and is only a minor collision, chances are you’ll think about settling the matter privately with the opposite social gathering and signing a Traffic Accident Settlement Agreement.

Nonetheless, if human lives are misplaced or injured, we don’t suggest that the motive force settle the matter privately, as a result of even when each events have signed a visitors accident settlement settlement, the opposite social gathering might out of the blue change their thoughts and demand an enormous quantity of compensation from you.