The No Claim Discount (NCD) or No Claim Bonus (NCB) is a reward scheme received by motor policy holders for not making a car insurance claim during the preceding 12 months. Once you have claimed on the motor insurance then your NCD will be forfeited and falls back to 0%.
Another word, if no claim is made or arises from your policy and provided your vehicle is insured for a a continuous period of 12 months in each of the following instances, you are entitled to a No Claim Discount on renewal of you policy as follows :- (these percentage is for reference purpose only, it might vary from different insurance company)
Period of Insurance Discount
After the first year of insurance 25 %
After the second year of insurance 30 %
After the third year of insurance 38 1/3 %
After the forth year of insurance 45 %
After five or more years of Insurance 55 %
Can I transfer my NCD / NCB from one vehicle to another?
Yes you can as the NCD / NCB car insurance is tied to your name and not a car. This typically happens when you have sold your old vehicle and want to transfer your NCD/ NCB to the vehicle you are purchasing. If you do not transfer your NCD/ NCB to another vehicle, your NCD/ NCB entitlement level will drop one level each year. For example, if your NCD / NCB entitlement is 55% this year, it will drop to 45% next year, if it is not transferred to another vehicle. This will continue until the NCD / NCB level reaches 0%.