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Demerit Points: How They Work, How They Affect Insurance

November 26, 2012

Demerit PointsThe demerit point system is designed to hold drivers responsible for their actions on the road by assigning a certain number of points to the various types of traffic violations. The consequences of getting demerit points can include higher car insurance costs and even the loss of your license if you accumulate too many.

The Basics of Demerit Points

When you are pulled over by the police or involved in a traffic incident, and receive a traffic ticket as a result, you may earn demerit points on your licence. Everyone starts with zero demerit points when they first receive their license, and they can generally be avoided with careful driving.

The number of demerit points you receive depends on the severity of the violation. Minor traffic violations such as a basic speeding ticket or running a red light have the lowest demerit point value, usually 2-3 demerit points. More serious violations such as careless driving or leaving the scene of an accident can carry very high demerit point values, up to 7 points.

Demerit points do come off your license after a specific period of time, but if you are convicted of another violation during that time period, they will accumulate on your license.

The Insurance Consequences of Demerit Points

The first consequence of getting demerit points is of course the ticket. There may be a fine you will need to pay or other legal consequences. Once the demerit points are on your license, you are likely to be charged for them by your insurance company. This generally occurs on your next renewal date when the insurance company runs your driving record.

Each insurance company determines how they will charge for tickets and what the increase will be on premiums. As a general rule, the more tickets you have, the more you can expect to see your insurance rates go up. If you accumulate too many tickets, you may find yourself facing a non-renewal from your insurance company. This means that the insurance company has determined that you are now too high a risk for them to insure, and you may need to go to a high risk car insurance company instead. Most insurance companies do not take the demerit point total into consideration they look more at the severity of the ticket.

You can expect the number of points to generally correlate with how much the insurance company charges you because the more demerit points you have means that you have had a lot or a severe ticket.

Insurance companies may charge for up to three years for a traffic violation on your record, and the charge goes from renewal date to renewal date, not from the date of the ticket. If you have questions about how your insurance company will handle demerit points on your license, you should call your insurance professional to find out what your company’s rules are, as each company will handle things differently.

And because insurance companies charge different rates, you should shop around for car insurance quotes – even if you have tickets on your driving record, as you may find a lower rate!

Other Consequences of Demerit Points

If you accumulate too many points, you may face action from the driver licensing agency in your home province. In Ontario, for example, at 6 demerit points a warning letter is sent out, and at 9 points a meeting is required with the driver to determine a course of action. 15 demerit points will result in a suspension of your license. Licence suspensions can have an impact on your insurance rate also as part of a good driving profile is years of continuous licencing. Each province has their own system for handling demerit points, but all will suspend your license if you accumulate too many.

Demerit points can have even more serious consequences for those in the graduated licensing program, and could set back your ability to qualify for a full license. Drivers may be required to pass new tests in order to regain their licensing status.

The demerit point system is in place to ensure that drivers who incur violations are held responsible and to encourage drivers to keep a clean driving record. There are many costs associated with demerit points, but how they will apply to you depends on a variety of factors including what type of violation you received, how many demerit points it carries, and how your insurance company handles that type of violation.

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