Saturday, 13 August 2011

Demerit Points and Insurance Rates

One of the biggest fears as a driver is receiving a ticket that results in demerit points. Once enough demerit points are accumulated, your license could be suspended and you may be forced to plead your case to the Ministry of Transportation. Not only will you have to pay a fee for the ticket, but you could also find yourself without a way to get around! What's worse, your insurance premiums could go up.

The relationship between insurance rates and demerit points is, however, largely misunderstood. There is a widespread assumption that demerit points automatically result in an increase in your insurance rate. This is not the case. While there are many traffic violations with demerit points that could result in an increase in your premiums, there are also some that do not.

The insurance industry categorizes traffic violations into minor, major, and serious violations. Minor violations do not typically result in premium increases. Major and serious violations, by contrast, usually entail some increase. Serious violations like careless driving can earn you upwards of 6 demerit points and a 100% increase in your insurance premiums; minor violations like turning left improperly can result in 2 demerit points.

What's important to note is that a violation such as turning left improperly, which results in demerit points, does not usually result in an increase in premiums. That's right: a traffic violation that earns you demerit points may not mean your insurance will increase.

That being said, it should be noted that driving safely is always in your best interests. Financially, a safe record means you'll be paying the lowest possible premiums. More importantly, however, you will be doing your upmost to keep those around you --and yourself-- as safe as possible. In the end, that's what's most important.