From 1 June 08, all motor accidents have to be reported to the insurance company within 24 hours of occurrence or by next working day. The insurers will do the rest, from arranging for a replacement vehicle to making third-party claims. Should you fail to report promptly to your insurer, your claims may be prejudiced or even declined by your insurer. There is a penalty of deduction of 10% on the No Claim Discount (NCD) upon renewal of your policy. Even if you are new driver with no NCD given, you may not be awarded NCD in the subsequent years.
Your No Claim Discount (NCD) for motor insurance will drop from 50% to 20% once you make a claim for an accident? And it becomes 0% after two claims?
This, unfortunately, happens to my hubby who met with an accident earlier this year. His motor insurance premium soared from $534 (after 50% NCD deduction) to $918 after making a claim. He thought of changing the insurer but only to discover that it will cause him even more — up to $1500 instead.
Surprisingly, even after 10 years of driving experience, he is ignorant of that fact that he can protect his NCD with just a small nominal premium annually (Well he should have asked me, shouldn’t he? Oh, Man!?). With the additional protection, he will still enjoy 50% NCD after making an accident claim, and thus the $1000 saving over the next 3 years from the increase of in premium. The NCD will only reduce to 20%, if, touch wood, a second claim is made. So, check with your motor insurer now on protecting your NCD.