How Demerit Points Can Affect Your Car Insurance


The demerit point system in Australia is already as confusing as can be, but it becomes even more perplexing when it comes to affecting your car insurance. Drivers in Australia start off with a clean state of zero demerit points. Points start adding up as you commit driving offenses until you hit a maximum threshold as determined by your state and your license.

Your demerit point limit depends on where you live and what time of license you have. In somewhere like New South Wales, drivers on an open or unrestricted license have a limit of 13 points in a three-year period. The number of demerit points you get for an offense depends on what you did and where. If you exceed your point limit, your license could get suspended, or you will have to serve a probationary “good driving behavior” period.

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Demerit points and your car insurance policy

Several car insurance providers take the demerit system into account when establishing premiums for your insurance policy. In general, the more demerit points you have, the higher your premium will be. This is because demerit points are a good indication of safety and responsibility on the road. More demerit points label you a higher risk for collisions or property damage, which makes you more costly to insure. It’s recommended that before pursuing a quote that drivers check within their region where they stand when it comes to the number of demerit points they have.

However, some insurers have taken a more lenient approach to auto insurance quotes. For example, AAMI evaluates claims history for their auto policy, rather than demerit points. Most insurers also provide rewards systems for safe driving, impacting premiums, and additional costs to take it easier on your wallet.

Of course, the safest bet to a better premium is to have zero demerit points and a clean driving record. It’s not a guarantee, but it certainly is taken into great account for auto insurance coverage.


Dropping Those Demerit Points

Demerit points are not deleted, but they do age. Any points accrued that are over 40 months old are not counted for demerit point suspensions, which is taken into accounts by insurers providing car insurance coverage. However, if enough points are accumulated over a 40-month time period, a suspension will be levied.

Drivers who receive a notice of suspension can apply for the previously mentioned good behavior period, assuring safer driving and accountability behind the wheel for a predetermined amount of time. However, if you accumulate two or more points during that good behavior period, your license will be suspended for double the original suspension time.

Drivers can also wait until the suspension lapses to get their license back or file an appeal with their location court over the suspension. It’s worth noting that if you drive while suspended, there could be some steep fines for drivers, with the possibility of a prison term if you commit a more serious crime or error of judgment.


Accountability Behind the Wheel

The greatest danger of the road is a drunk or impaired driver. Not only to themselves but to others.

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