Demerit Points Affect Insurance Premiums
Demerit Points Affect Insurance Premiums. Image: KnowInsiders

Demerit points play a critical role in how your driving behavior is monitored and how much you pay for car insurance in Canada. While many drivers focus on avoiding fines or license suspensions, they often overlook how these points affect their long-term insurance costs and overall driving record.

How Demerit Points Affect Your Driving Record

When you commit a traffic violation in Canada, the offense and associated demerit points are recorded on your driving abstract, which is maintained by your provincial licensing authority (e.g., Ontario’s Ministry of Transportation, British Columbia’s ICBC, or Québec’s SAAQ).

Key facts:

• Demerit points stay on your record for 2 to 5 years, depending on the province and severity of the offense.

• Minor violations, like speeding less than 15 km/h over the limit, typically stay for 2 to 3 years.

• Serious violations, such as reckless driving or DUI, may remain on your record for 5 years or longer, even after points are reduced.

Each province sets its own point thresholds for license suspensions. For example, Ontario drivers can face a license suspension if they accumulate 15 or more points, while British Columbia drivers may face ICBC surcharges at just 4 points.

Your driving abstract is accessible to both law enforcement and insurers and is a crucial factor in determining your risk profile.

Read more: How Demerit Points Work Across Canadian Provinces and What Drivers Need to Know

The Impact of Demerit Points on Insurance Premiums

Insurers view demerit points as indicators of risky driving behavior, and accumulating points can significantly increase your car insurance premiums.

How insurers use demerit points:

• Most Canadian insurers review the past 3 to 5 years of your driving history.

• Higher demerit point totals often classify you as a “high-risk” driver.

• Even 1 to 3 points can result in a modest premium increase, but 6 or more points can lead to substantial hikes.

Provincial examples:

• British Columbia: ICBC applies Driver Penalty Point (DPP) premiums starting at 4 points, with surcharges ranging from $210 to over $1,000, depending on the total.

• Ontario: While demerit points alone don’t trigger automatic surcharges, insurers factor them heavily into rate calculations, especially when combined with other violations.

• Québec: Insurers typically impose premium increases when drivers accumulate 4 or more points, particularly for probationary license holders.

In my experience advising clients across Canada, even drivers with minor infractions are often surprised to learn how aggressively some insurers penalize them for points.

According to the Insurance Bureau of Canada (IBC), drivers with 6 or more demerit points could pay 20% to 50% more in annual premiums depending on the province and insurance provider.

Read more: Demerit Points for New Drivers in Canada: What You Need to Know

Strategies to Reduce Points and Lower Premiums

1. Take Defensive Driving Courses

Several provinces, including Ontario and Québec, offer driver improvement or defensive driving programs that can help reduce demerit points.

Ontario: Eligible drivers may reduce 2 points by completing an approved course.

Québec: Defensive driving programs can remove points and may even qualify drivers for insurance discounts.

In British Columbia, while points remain on record, ICBC may waive certain premiums if you complete an approved Driver Improvement Program (DIP) after a warning notice.

2. Monitor Your Driving Record

Regularly check your driving abstract via your provincial licensing authority to catch any errors or outdated points that should have expired.

Helpful link: www.ontario.ca/page/order-drivers-record

3. Avoid Repeat Offenses

Points typically accumulate quickly with repeated minor offenses (e.g., two speeding tickets in 12 months). Commit to safe driving habits to prevent further penalties.

4. Shop Around for Insurance

Some insurers specialize in high-risk drivers and may offer better rates, even if you have existing demerit points.

5. Contest Charges When Appropriate

In certain cases, it may be worthwhile to contest traffic violations in court, especially for infractions that carry multiple points.

Final Thoughts

Understanding how demerit points impact both your driving record and your wallet is key to managing your insurance costs and protecting your license. By proactively addressing points through defensive driving programs, safe driving habits, and regular monitoring of your record, you can minimize financial penalties and maintain a clean driving profile.

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