Demerit Points and Insurance Rates
Demerit points only affect insurance rates when the driver has accumulated too many points causing the drivers licence to go under suspension.
Where a licence is suspended due to demerit points the insurance rates will double or go into high risk rates of thousands of dollars per year. Each class of drivers licence has a limit whereupon the licence will be suspended:
- G1 Licence – Any traffic ticket with 4 or more points
- G1 Licence – Any accumulation of 6 or more points
- G2 Licence – Any traffic ticket with 4 or more points
- G2 Licence – Any accumulation of 6 or more points
- G Licence – Licence review interview at 8 points
- G licence – Suspension at 15 points
When assessing your automobile insurance rates, insurance companies do not look at demerit points but they look at your driving record and the type of traffic convictions.
Although a traffic or speeding ticket may or many not have demerit points, the insurance company looks at any traffic tickets on a driving record to determine your cost of insurance.
Insurance companies look at convictions and types of traffic tickets, not an accumulation of demerit points
With rates for automobile insurance the insurance company will also look at;
- the vehicle being driven
- driver’s age, sex and address
- where the driver lives
- how far the driver commutes to work
Although for many of the above the driver has no control over, the driving record can be controlled.
Where the driver does receive a traffic ticket from the police, fighting the ticket may reduce the implications on the insurance, including removing any demerit points.
Driver Records and Insurance
One of the most important factors insurance companies look at the driving record.
What insurance companies are looking at is what is their risk to insuring the driver?
Is the driver likely to be involved in an accident where there is personal injury or property damage that they will have to pay out on.
To determine what fee to charge for motor vehicle insurance, the insurance companies look at historical averages of categories of drivers.
Statistics have shown insurance companies that drivers with poor driving habits and those with convictions for traffic tickets and previous accidents and claims are more likely to be involved in accidents.
Subsequently drivers with convictions and the subsequent demerit points will pay more for insurance than drivers with clean driving records.
Insurance rates categorize traffic ticket convictions as;
- Minor traffic convictions, and
- Major traffic convictions
Minor traffic tickets with the associated demerit points are tickets such as, speeding under 50km/h, red lights, turning violations.
Minor traffic tickets may increase the insurance, to which three (3) minor tickets would put the driver into high risk insurance rates.
Major traffic tickets are tickets such as speeding 50km/h or more, careless driving, and fail to remain accidents.
Major tickets will immediately increase the insurance, the driver may be refused insurance or put into high risk or facility insurance.
As insurance companies are private for profit businesses they set their own rates for increases as they see fit.
As a general rule the more traffic tickets the driver has, the higher the insurance rates will be.
When Demerit Points Appear on the Licence
Demerit points are added to the driver’s licence only after the driver has been convicted of the traffic ticket, or the driver pays the ticket.
Drivers can reduce the amount of time demerits are on the driving record by applying for a trial date. The demerit points do not go on the driver record until the court date, which maybe three (3) to twelve (12) months from the offence date, depending upon the court.
Demerit points are kept on the driving record or driving abstract for two (2) years from the date the driver received the ticket, but the demerit points only go on the driving record upon conviction or payment.
The conviction or sometimes called a “line on your abstract” for the traffic ticket goes on the driving record for 3 years from the court date, or 3 years from the date the ticket was paid.
Class G drivers licence holders are allowed to accumulated a total of 15 demerit points.