Personal Finance Term
NCD
Motor Insurance & No-Claim Discount
Compulsory cover for your vehicle, where the No-Claim Discount rewards claim-free years with a rising premium discount. Renewed annually alongside road tax, it is required to drive legally in Malaysia.
Malaysian motor policies come in three tiers: third-party only (the legal minimum, covering injury or damage you cause to others), third-party fire and theft, and comprehensive (which also covers your own vehicle). The NCD rewards safe driving — it climbs on a fixed scale for each consecutive claim-free year up to a maximum of 55% for private cars — and the discount belongs to you, the named driver, so it transfers when you change cars or insurers.
Making a claim usually resets your NCD, so for small repairs it is often cheaper to pay out of pocket and preserve the discount. Premiums are also affected by your car's market or agreed value and add-ons such as windscreen, flood, and named-driver cover. Motor takaful offers the same protection on a Shariah-compliant basis. You can check and transfer your NCD through the MyCarInfo / ISM system used by all insurers.