Do Demerit Points Really Matter in Insurance

When most people see the red flashing lights in their rear view mirrors they pull over, roll down the window and wait for the police officer to arrive. They are expecting a ticket but breathe a sigh of relief when they notice it is only a monetary fine and they are given no demerit points.. Wait not so fast. That relief may be misguided.  Demerit points have absolutely no bearing on your car insurance.  What matters in regards to your auto insurance premium is the number of tickets and what they are for regardless of demerit points. The exception are parking tickets and red light cameras as these cannot be connected to any individual so they are not a factor on your insurance premium.

Each time you change insurance companies your driver record will be checked. Not for demerit points but the number of tickets and their severity.  Below is a chart showing a sample premium for a 35 year old married male living in Toronto who has been licensed and insured for 15 years. As you can see even one speeding ticket has an effect on insurance.  The chart shows the impact on the premium but a ticket has more than a financial price tag.  After 3 tickets an insurance company may refuse to insure you as you have too many risk points.  Risk points are different from demerit points. Demerit points are used by the Ontario government to determine if your driver license should be revoked. Risk points are used by the insurance companies to determine if they will insure you. Tickets, at fault accidents, nonpayment cancellations are just a few examples of factors that generate risk points. Risk points also vary from company to company. So don’t be fooled by the myth that just because you did not receive demerit points your car insurance premium will not be affected. So if you really want to save money on your car insurance slow down, drive the speed limit and avoid getting a traffic ticket from a police officer.

How tickets affect your insurance premium

How tickets affect your insurance premium