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Demerit Points: How They Work, How They Affect Insurance -

July 11, 2013

Demerit points are made to keep drivers accountable for their actions on the road by assigning a certain number of points to different kinds of traffic law violations. The effect of demerit points will depend on how many you have received. Too many demerit points can show insurance companies that you have a tendency to disobey traffic regulations, thus making you a higher risk. This can result in much higher insurance rates. Furthermore, if you accumulate a certain number of points on your license, it could be suspended for a predetermined period of time.

How Demerit Points Work

Every province will handle demerit points in a slightly different way; however there are basic guidelines that are applied and valid all over Canada. If you receive a traffic ticket after being involved in an accident or if you were pulled over by a law enforcement officer, demerit points will be applied against your license once you are found guilty of the offense. When you first receive your driving license, you will begin with zero points and can keep it that way if you drive carefully and obey all traffic regulations.

The exact number of demerit points you receive will vary according to the province you are in and the specific violation you have committed. A minor violation, such as going 20 km/h over the speed limit on the highway, or failing to stop at a red light may get you a small amount of demerit points, such as 2 or 3. On the other hand, more serious violations, like racing on a public road, reckless driving, or failing to remain at the scene of an accident may result in a much higher amount of demerit points being assessed. Committing any of these infractions can result in obtaining as many as 10 demerit points in some provinces.

Eventually, the demerit points will come off after a certain period of time has passed. However, if another traffic violation is committed during the same period, they will accumulate.

The Impact of Demerit Points on Your Insurance

Having demerit points on your license may have consequences on your auto insurance. You may be charged a higher rate when you renew your insurance after the company verifies your driving record.

Different insurance companies will handle demerit points according to their own internal rules. In general, the more demerit points you have accumulated, the more your insurance rates will increase. Although this rarely happens, if you have committed particularly serious traffic violations, such as getting caught street racing while going twice the speed limit, your insurance company may refuse to renew your policy altogether. This may force you to seek insurance from a company that specializes in insuring high risk drivers. While it will still be possible for you to obtain insurance, you will pay much higher premiums.

Insurance companies may look back up to three years on your driving record when looking for traffic violations that would affect your rates. This means that even if the demerit points you've accumulated have expired, your insurance rate can still go up if you have received demerit points.

When assessing your new rate, insurance companies may look at other factors, such as the amount of years you have been licensed to drive or the amount of time you've had a policy with them. If you have questions about how your insurer handles traffic violations and demerit points, the best course of action to take is to contact them and ask.

Demerit Points Affect More Than Just Insurance Rates

Licensing agencies in different provinces have various ways of dealing with drivers who commit traffic violations. Some will send you a warning letter after you've accumulated a specific number of points. While all licensing agencies will suspend your license if you have too many points. The duration of the suspension, as well as the actions that you will need to take to get your license back depend on the number of points accumulated and the province that issued your license.

Some will require that you take new written or practical tests to get back your license. In certain cases, you may need to attend a traffic safety course to get your license back. Those who have a probationary license or learner's permit will find that demerit points could increase the amount of time they would need to wait to get their full license. Having an excessive number of demerit points may affect your ability to apply for a new class of license, such as one required to drive a truck or bus. Overall, being a safe driver on the road will help you save money on your car insurance.

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