How Demerit Points Affect Your Insurance in Canada

Even the most experienced and safest drivers make traffic violations. For instance, you may lose a speed limit sign and earn yourself a speeding ticket. If you receive a traffic citation, the first step is getting yourself out of the mess. Most people rarely think about insurance once they pay the fines, not unless in the event of a serious accident. And when the time comes to renew the auto insurance, they are unpleasantly surprised by the new insurance rates. Do demerit points affect your insurance in Canada? Well, the answer is yes. If you are found on the wrong side of the law, be it speeding, traffic violations or even dangerous driving, your insurance rates could skyrocket.   

What are demerit points?

These are points that are used to penalize drivers who do not follow the traffic rules. For instance, in most provinces, 2 demerit points are added for minor offences. This can even go up to 15 points depending on the severity of the offences. This is a system that aims to encourage drivers to improve their driving habits and observe driving rules. 

How demerit points affect your insurance?

Many factors go into calculating your insurance premiums. For instance, your age, where you live, the car you drive as well as your driving history are just some of the factors that insurers use to determine your insurance rates. Driving records are one of the major factors that insurers use to determine your premium.  
If you only have one minor infraction, say speed driving, your rates may not be affected. Please note that your rates may change based on your insurer. While the government states that one mistake should not affect the insurance rates, insurers have different rules and guidelines. However, if you have had several traffic violations cases in the past, including minor ones, your insurance rates will increase. Also, having one major case can significantly raise the cost of your insurance. For instance, if you are high and are involved in an accident, not only will your insurance rates increase but you also risk other regulatory consequences such as license suspension or even jail time. 
It is important to note that insurers do not base your premium on the number of demerit points accumulated. Rather, your premiums are determined by your driving history. However, your driving history entails the types of traffic violations that are shown via demerit points. 
For minor tickets, your insurance rates could rise by 10%. Among traffic offences classified as minor include failing to signal, defective brakes, headlight offences, improper towing, speeding, unsafe move, unnecessary noise and overloading. Even something like wearing headphones while driving can lend you a traffic ticket, for more information you can read in more detail on whether or not is it illegal to wear headphone while driving. In addition, you might also want to consider being aware of how much would red light ticket cost you. 
For major traffic violations, your insurance rates could increase by 25%. These include distracted driving, speeding in a construction area, failure to report an accident or even improper passing of a school bus. 
Criminal driving convictions could increase your insurance rates by 100%. For instance, if you are caught racing, failing to obey a police officer, driving under influence, criminal negligence, refusing a breathalyzer test or even motor manslaughter, your insurance rates will be insanely high. 
Remember, insurance companies have varying rules regarding this. While some insurers may opt to increase the insurance rates for a person convicted of criminal driving charges, others may refuse to insure them. This also means that you will not find a uniform increase in insurance rates in all insurance companies. 
For instance, in Ontario, a driver with 2-8 points will receive a warning letter. Drivers who have accumulated 9-14 points may be invited for an interview to discuss their driving record and explain why they should not have their license suspended. Drivers with over 15 demerit points have their license suspended for 30 days. In the state, new drivers are subjected to harsher penalties. 
In Alberta, fully licensed drivers will have their driving license suspended for one month once they hit 15 demerit points. For graduated driver’s license holders, the license is suspended for one month at eight demerit points. 
In Quebec, fully licensed drivers below the age of 23 will have their license suspended for three months at eight demerit points while those aged 23 and 24 will have their license suspended for a minimum of three months at 12 demerit points. Fully licensed drivers aged 25 and above will have their license suspended for a minimum of three months at 15 demerit points. Those who hold probationary or learner’s licenses will have their license suspended for three months at four demerit points. 

How long do demerit points affect the insurance rates?

In Canada, any traffic violation conviction remains on your driving records for three years from the ticket date or the date convicted in court. This means that traffic violations can affect your insurance rates for up to three years from the policy starting date. New traffic violations can affect your insurance rates at the time of policy renewal. You can also learn more by reading on how driving record & history affects car insurance rates.  

How can you lower your insurance rates if your driving record is not perfect? 

We all make mistakes. And some can be costly. If you do not have a clean driving record, you will inevitably pay higher insurance rates compared to someone who has clean driving records. However, this does not mean that you should get comfortable with the high rates, especially if they are unreasonable. Here are some measures that you can undertake to reduce your insurance rates. 

• Opt to use public transit often- Using public transit often can significantly reduce your insurance rates especially if you drive over long distances. This move will lower the annual kilometres driven, reducing the likelihood of the occurrence of an accident. 
• Exclude high-risk drivers from driving your car- If you had included a high-risk secondary driver in your policy, then you may have to exclude them. High-risk drivers are an added liability to your insurance. Also, if you often let high-risk persons drive your car, then you need to reconsider it. 
• Shop around and get quotes from different insurers- As we mentioned, insurers have varying pricing guidelines. Regardless of whether your driving record is perfect or not, the coverage and pricing offered by your insurer may significantly vary. Shopping around and comparing quotes ensures you get the best value for your money. 

Bottomline

Failure to follow road rules can get you demerit points. In Canada, demerit points can affect your insurance premiums. Some insurance companies can even deny you insurance if you are deemed high risk. As such, it is vital to follow traffic laws and drive safely.