Motor Insurance Policies and No Claim Discount (NCD)

Vocabulary flashcards reviewing key types of motor insurance coverage features, target policyholder groups, and No Claim Discount (NCD) rules and rates.

Third-Party Only (TPO)

A motor insurance policy that covers third-party bodily injury and property damage only; it is best for owners of older or low-value vehicles seeking the cheapest legal option.

Third-Party, Fire & Theft (TPFT)

A motor insurance policy that covers third-party liability plus fire and theft of the insured vehicle; it is best for vehicles parked in higher-risk areas or older cars with moderate value.

Comprehensive Insurance

A motor insurance policy covering third-party liability, fire, theft, and damage to the insured vehicle itself (including collisions/accidents, flood, and vandalism / malicious damage); it is best for most private car owners, especially those with newer or expensive vehicles.

No Claim Discount (NCD)

A reward given to policyholders who do not make any claims during a policy year.

First-Year NCD for Private Cars

A discount of $20\%$ earned on private car insurance after one claim-free year.

Maximum NCD for Private Cars

The highest allowable No Claim Discount reachable for private cars, which is $60\%$.

Maximum NCD for Other Vehicles

The highest allowable No Claim Discount cap for non-private vehicles, which is $30\%$.

NCD Transferability

The provision that allows an earned No Claim Discount to usually be transferred between different insurance companies.

NCD Single Vehicle Restriction

The policy rule establishing that an NCD can only be applied to one vehicle at a time.