The demerit points system in Australia can be confusing enough, let alone trying to understand how it affects your car insurance.
So if you've ever wondered how your points influence your premium, read on as we untangle the mystery behind demerit points and your car insurance.
But first, a refresher: How does the demerit point system work?
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. For example, Queenslanders on a full license can accrue 12 demerit points but L- and P-platers can only have four.
Do I have to tell my insurer how many demerit points I have?
Your insurer will most likely ask you to disclose how many demerit points you've accrued and you're bound by the duty of disclosure to answer honestly. Depending on the insurer, they may even reduce or refuse to pay a claim if you give false information.
How do my demerit points affect my car insurance premium?
Demerit points are never a good thing, from the ticket that comes with them to your tainted driving record and of course, a spike in your car insurance premium. In general, the more demerit points you have, the higher your premium will be. This is because demerit points are a good indication of your safety and responsibility behind the wheel. More demerit points put you at higher risk for collisions, which make you more costly to insure.
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 will be higher than it would be if you had zero demerit points.
So if I have zero demerit points, am I guaranteed a low premium?
If you have zero demerit points then you can expect a lower premium than you would otherwise face if you had points accrued. As demerit points aren't the only thing insurance companies take into consideration, it's impossible to guarantee that your car insurance premium would be low just because you have a perfectly clean driving record. It is however an encouraging sign!
Remember, insurers all vary in how they determine risk, so it's worth calling yours to ask how demerit points affect your car insurance.