The No Claim Bonus/Discount (abbreviated as NCB/NCD) is a reward system where drivers (i.e., policyholders) who have not made any claims in the past year are offered a discount or bonus on their renewal premiums by the insurance company. The No Claim Discount first appeared in car insurance, and since then, more and more insurance companies have incorporated the NCB/NCD into their products to attract customers. NCB and NCD refer to the same discount, they are just different terms.
In Hong Kong, most companies that provide car insurance use a ‘progressive ratio’ to calculate the No Claim Discount (NCD), meaning that the longer you go without making a claim, the higher the discount you receive. The NCD varies between different companies and even different types of vehicles. From online data, the NCD ranges from 20% to 60%.
| Years | Motorcycles and Commercial Vehicles | Private Cars |
| Less than 12 months | 0% | 0% |
| 1st year with no claims | 10% | 20% |
| 2nd year with no claims | 20% | 30% |
| 3rd year with no claims | 30% | 40% |
| 4th year with no claims | 30% | 50% |
| 5th year with no claims | 30% | 60% |
The transfer of the No-Claim Discount takes place when the policyholder switches their insurance company. In certain instances, the accumulated “No Claim Discount” can be transferred to the new policy upon switching.
Cases where the No Claim Discount can be transferred:
Cases where the No Claim Discount cannot be transferred:
If the “No Claim Discount” cannot be transferred, the NCD/NCB for the new policy will be recalculated. It’s worth noting that each insurance company’s method of calculating the No Claim Discount may differ, and the existing accumulated “No Claim Discount” may not necessarily be fully transferable.
For owners of commercial vehicles or motorcycles, making a single claim will reset the No Claim Discount/Bonus (NCD/NCB) to zero.
However, many insurance companies provide a “reduction mechanism” for private cars. If a driver has not made any claims for 4 or 5 consecutive years and the NCD/NCB reaches 50% to 60%, after making one claim, the NCD/NCB for the 5th or 6th year will return to the level of the 1st or 2nd year, that is, retain 20% to 30% of the NCD/NCB.
Of course, there are situations where making a single claim will result in the loss of all No Claim Discounts, including:
As mentioned above, making a claim can potentially result in the loss of all No Claim Discounts, leading many people to wonder:
“Should I hide a traffic accident from my insurance company?”
You must notify your insurance company within 24 hours of a traffic accident, but you can reserve your “claim decision”. If you believe that the loss of the No Claim Discount is greater than the amount of out-of-pocket repair costs, you can choose to forgo the claim. Conversely, you can still apply for compensation.
Many people are curious, besides car insurance, do other types of insurance offer “No Claim Discounts”?
To increase product attractiveness, many medical insurance products also include No Claim Discounts (NCD/NCB). However, different insurance companies and even different plans have different arrangements:
Bowtie’s Brand New ‘No Claim Reward’!
Have you ever thought that ‘No Claim Rewards’ can be used to pay for excess medical expenses?
As long as there are no claims within 6 months after the VHIS policy takes effect, you can earn this reward!
Monthly premium × 8% = BowtieCash earned for the month
What is BowtieCash used for? It can be utilized to cover any outstanding balance.
If future claims surpass the coverage limit of the Bowtie VHIS plans, BowtieCash can be used to pay for these additional medical expenses.”
The more rewards you accumulate, the more claims you can make!
When selecting medical insurance or VHIS, the “No Claim Discount” is by no means the most important consideration. Adequate coverage, long-term cheaper premiums, and compensation data should be the items you pay most attention to. If you are undecided between two similar plans, you can certainly consider other additional factors, such as the “No Claim Discount”, to make your decision.
Bowtie’s VHIS has a monthly premium of HK$2001, providing an annual coverage of HK$600,000, with an actual compensation rate reaching 90%2!
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