It stands to reason that the more demerit points you notch up, the less rosy your driving record will look. But you might be wondering, do demerit points affect insurance premiums?
Will one or two points make your car insurance more expensive? And do you have to disclose exactly how many demerits you’ve accrued when you’re buying a new policy or renewing an existing one?
The following information could provide the answers you’re looking for, starting with some clarity on the link between demerit points and premiums.
Can demerit points affect car insurance?
Yes, they can, although it varies from insurer to insurer. Some insurers do take demerit points into account when calculating car insurance premiums.1
“At Youi, we assess each new policy application or policy renewal on a case-by-case basis, including taking a person’s driving history into account,” says Marni Jackson, Youi’s Head of Product – Vehicle and Lifestyle.
“But yes, if you have accrued demerit points on your driver licence, that’s something that could increase your premium.
“Generally speaking, when a driver has lmultiple demerit points, it can be an indication of repeated or serious offences, which increases the perceived risk – and potential cost – of providing them with insurance.
“That said, there are plenty of risk factors that help shape your overall premium, and demerit points alone don’t necessarily mean you’ll be paying through the roof for car insurance. It simply means your premium could be higher than it would be if you had zero demerit points.”
Demerit points may also be taken into account when it comes to your Compulsory Third Party (CTP). For example, in New South Wales, just one or two demerit points on your licence could bump up the premium on a Green Slip – as CTP is known in NSW – by over $100 in some cases.1
Do you have to tell your insurer how many demerit points you have?
If an insurance company asks you how many demerit points you or anyone else listed on your policy has, you have a duty under Australian insurance law to answer accurately and completely.2
Fudging the truth can backfire. If you’re not honest about something that relates to your driving history, your insurer may reduce or refuse any payout in the event that you need to make a claim.1
Now that you know demerit points can affect your car insurance, you might need a refresher on how the demerit point system actually works.
How do demerit points work?
Every driver in Australia starts with a clean slate of zero demerit points, as well as a defined demerit point limit. If you’re caught breaking certain road rules, in addition to being hit with a fine, you’ll also have a number of penalty points – called demerit points – added to your driver’s licence.3
Some driving offences that attract demerit points are obvious – for example, speeding or running a red light4 – while others might fly under the radar, such as failing to give way to a bus leaving a bus stop in Queensland or holding up traffic in the fast lane by not keeping left in NSW.
Different offences attract a different number of demerit points and in some states and territories, double demerits can apply to specific traffic offences,4 so it may be worth taking the time to understand the rules around double demerit points where you live.
What happens if you exceed your demerit point limit?
If you rack up more demerit points over a certain timeframe than your driver licence type allows, your licence may be suspended for a period of time.4
Alternatively, depending on the type of licence you hold, you may have the option of serving a 12-month good driving behaviour period rather than having your licence suspended.5, 6
While you can keep driving over this period, it usually means that if you accumulate more than one or two demerit points over the 12 months, your licence gets suspended for double the original suspension period.5, 6 For example, if the original licence suspension period was four months, the new licence suspension would be eight months.5, 6
When do demerit points reset or expire?
In most states and territories, demerit points remain active on your driver licence for around three years.6, 7, 8 The exception is in Victoria, where demerit points last for four years.9
How to check your demerit points?
Demerit points don’t stay active forever, so if you’ve earned some over the past few years, you might want to check how many you actually have at any point in time.
Keeping track can be as simple as jumping online and heading to the relevant website, depending on which state or territory has issued your driver licence.
How do insurers determine responsible drivers?
Everything from your age and your driving history to your experience and claims history may be taken into account by an insurer to determine whether you’re a low- or high-risk driver.10
So, it follows that driving safely – and keeping your demerit points tally in check – may contribute to keeping your car insurance costs down. And even if you have been classified as high risk in the past, take heart. Insurers often evaluate driving records over a period of time – show you’re a responsible driver moving forward and it could lower your risk classification in the future.10
Now that you know the roles demerit points and being a responsible driver can play, consider starting a quote to find out what kind of you-shaped car insurance options Youi can offer.
1 Source: Canstar – Do demerit points affect your car insurance premiums?, April 2025
2 Exclusions, limits and additional fees may apply. See the Car Insurance PDS for full details.
3 Source: NSW Government – How demerit points work
4 Source: Qld Government – About demerit points
5 Source: Qld Government – Open licence demerit points
6 Source: WA Government, Department of Transport and Major Infrastructure – Demerit points
7 Source: NT Government – Check your demerit points
8 Source: Service NSW – Check your demerit points
9 Source: Transport Victoria – Demerit points
10 Source: Canstar – Car insurance for high-risk drivers: What to consider, April 2025
