Demerit Points And Your Insurance Rate

Believe it or not getting a ticket for speeding just 10 km per hour over the limit can cost you a lot more in the long run than paying a minor fine. Unfortunately, the relationship between tickets, demerit points and your insurance rates is misunderstood by many drivers. However, the relationship is an important one given the impact it can have on your driving record and the amount you pay for your insurance.

Insurance companies actually consider the severity and number of tickets on your driving record, not the number of demerit points you've acquired, when calculating your insurance rate. But if that's the case do demerit points matter at all? Here is what you need to know:

Demerit points and your insurance

  • Insurance companies generally categorize convictions as "minor", "major" or "serious". Major and serious convictions can lead to higher insurance rate increases than minor convictions.

  • Some insurance companies offer a conviction-free discount, if you have no prior convictions on your driving record. One minor ticket might not affect your insurance rating, but you will lose this discount.

  • All infractions that result in the accumulation of demerit points are not necessarily considered serious convictions by insurance companies. For example, making an improper left turn, you can result in two demerit points, but it is considered by insurance companies as only a minor conviction.

  • A major or serious conviction, regardless of the associated demerit points, will result in losing any conviction free discount and a significant increase in your insurance rate. As an illustration, failing to obey a school crossing sign is classified as a major conviction and result in three demerits and a 15% surcharge on your annual premium rate with some insurance companies. Careless driving or speeding in excess of 50 km per hour over the posted speed limit are both serious convictions and either one of these will not only earn you six demerits, but also a 100% surcharge on your insurance rate.

Demerit points and your driver's license

  • The Ministry of Transportation in each province sets a limit on the number of demerit points you may acquire before your license is suspended.

  • In Ontario, once a fully licenced driver accumulates six demerit points, a warning letter is sent. Once a driver accumulates nine demerit points, the Ministry may require that he be interviewed and plead his case as to why his license should not be suspended. At 15 or more demerit points, the driver's license is automatically suspended for 30 days.

So while insurance companies don't look specifically at demerit points when settling their rates, accumulating them is certain to cost you in the long run. For this reason, all drivers would be well advised to steer clear from breaking the rules of the road and avoid tickets altogether.

But if you find yourself in the unfortunate situation where your insurance rates have increased as a result of a less than perfect driving record, do not despair. Rates vary significantly from one insurance company to another for the exact same car and driver. In fact, some companies even target this type of driver. The challenge is finding those companies. can help by allowing you to compare rates from competing insurers to save you time and money.