Important facts about the No Claims Discount (NCD) in Hong Kong

NCDs, aka No Claims Discounts, is a premium discount offered to policyholders for every year of driving claims-free. Originally known as No Claims Bonus (NCB), the name was subsequently changed to reflect its nature clearer - it does not give the policyholder any extra money, but rather reduces their premium the following year.

For car insurance in Hong Kong

In Hong Kong, the NCD usually takes on an increasing percentage scale. Although discount rates vary among different insurers, most providers offer a cap of 60% off the policyholder's annual premium.

Below is a typical example of how NCDs are applied to car insurance premiums in Hong Kong:

1 year of claims-free driving: 20% NCD

2 years of claims-free driving: 30% NCD

3 years of claims-free driving: 40% NCD

4 years of claims-free driving: 50% NCD

5 years of claims-free driving: 60% NCD

For commercial motor insurance

In contrast with individual motor insurance, vehicles used for work or commercial purposes are calculated differently, with the maximum discount being 30%. Here’s an example of how NCDs are typically applied to commercial motor insurance premiums in Hong Kong:

1 year of claims-free driving: 10% NCD

2 years of claims-free driving: 20% NCD

3 years of claims-free driving: 30% NCD

NCDs are transferable under specific conditions

Transferring from a local insurer

NCDs are common benefits provided by virtually all motor insurers in Hong Kong. As such, when you switch from one provider to another, you can in most cases enjoy the same NCD. All you have to do is provide proof that you are eligible to this discount with the current provider - it can either be in the form of a written confirmation, or stated in the policy document. Just make sure that your NCD and the length of claims-free period are clearly stated.

Transferring from an overseas insurer

For newly arrived expats, the process of transferring NCDs is more or less the same. To enjoy the same NCD with a new insurer, you need to obtain a certificate of insurance from your previous insurer to verify that you didn’t make any claims over the last 12 months.

Transferring from commercial to personal vehicles

You can transfer the NCD from your company car to your private car. To do this, you have to obtain a letter of consent for NCD transferal from your employer or authorized representative.

Transferring between vehicle types

NCDs are not transferable when you switch between different vehicle types. For example, if you trade in your van for a motorcycle, your NCD will be reset to 0%.

Transferring between vehicles under your name

If you own multiple vehicles, you’ll have a No Claims record for each of them, and it’s possible to transfer your No Claims Discount from one vehicle to another.

Transferring between vehicles under different names

If you’re selling your vehicle, the NCD will stay with you and the buyer won’t be entitled to your NCD.

Transferring as a named driver

If you’re driving exclusively behind the wheel of a company-owned car, or are a named driver of another insurance policy, you won’t be able to build up any No Claims record in the first place so there’s no NCD that you can transfer.

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