Do demerit points affect your car insurance premiums?

So you’ve had a speeding fine or run a red light and have demerit points as a result – will that affect your insurance? We take a look.

Breaking the road rules can see you being penalised with demerit points. All Aussie drivers start with zero demerit points and you gain them for various offences such as speeding, running a red light, not wearing a seatbelt or using your phone while driving.

The number of demerit points you get depends on the offence and also varies between states. The table below shows the demerit points you may get in each state for selected traffic offences – it is not an exhaustive list. As you can see, using a phone while driving will get you between three and five demerit points depending on the state.

Demerit point per state

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Sourced by www.canstar.com.au. Based on information available from State road authorities.

In most cases, you’ll also be hit with a fine as well as demerit points. Again this varies between states and territories and depends on what you did. For example, using a mobile handset while driving will cost you $555 in Victoria. If the matter is heard at court, the fine for illegal mobile phone/device use can be as much as $1,849. But what do demerit points mean for your car insurance premiums?

Do demerit points affect your car insurance premiums?

The answer to this is not straightforward as it varies from insurer to insurer. QBE, for example, takes demerit points into account. “QBE considers demerit points when determining premiums for our car insurance products sold direct or through select partners,” a QBE spokesperson told Canstar. Of course, demerit points aren’t the only consideration. QBE’s spokesperson pointed out that QBE also considers other risk factors such as driver age, the type of vehicle and where it is kept.

Youi also factors in demerit points. “Good driving is rewarded at Youi and as such premiums can be impacted when demerit points are gained,” explained Youi Insurance Head of Vehicle Product, Marni Jackson.

Allianz doesn’t calculate premiums based on demerit points, however, it does take license suspensions into consideration, including those due to the loss of demerit points, an Allianz Australia spokesperson said. “This means, if someone has recently lost their licence due to losing all their demerit points, we would not provide that individual with cover or they will be asked to pay a higher premium due to the licence suspension,” explained the spokesperson.

Suncorp, which also includes brands such as AAMI, GIO and Bingle, takes a similar position. “We use your claims history to help determine your insurance premium, not demerit points. Across many of our brands including AAMI, Suncorp and GIO, you gain extra rewards and benefits for every consecutive year you drive safely and don’t make a claim (up to a cap),” said a Suncorp spokesman. “However, if your licence is suspended as a result of having lost too many demerit points, that could increase your premium as you may be seen as a high-risk driver.”

IAG is another insurance provider that doesn’t take demerit points into account. “Across our IAG brands such as NRMA Insurance, CGU, SGIO, and SGIC, we do not consider a customer’s demerit points when calculating car insurance premiums,” an IAG spokesperson told Canstar. The spokesperson did add, though, that NRMA Insurance does consider demerit points when determining CTP insurance premiums. (See next point)

NSW Compulsory Third Party Insurance

One type of insurance that is generally affected by demerit points is Compulsory Third Party (CTP) cover in NSW – also known as a Green Slip. It protects you against compensation claims if you kill or injure someone in a road traffic accident. CTP insurance is legally required to register a car in Australia. It is an included cost of vehicle registration in most states but in NSW motorists pay for it separately.

Canstar looked at what difference demerit points can have on your CTP premium. As the table below shows, one demerit point increases the average premium in the hypothetical example by $154 – from $480 to $634.

CTP premiums by demerit points in NSW

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Source: www.canstar.com.au – 19/06/2023. Based on the NSW Government Green Slip Price Check tool. Quotes obtained for a Honda Civic with two drivers in their 40s residing in the Parramatta area with a history of no prior insurance claims. Other questions are considered in the quoting engine that have not been listed here.

Do you have to tell an insurance company how many demerit points you have?

If the insurer asks you how many demerit points you have or whether your licence has ever been suspended when you are obtaining a quote for cover you must tell them the truth. If you don’t and you need to make a claim the insurer may refuse to pay it.

How to check your demerit points

If you aren’t sure if you have any demerit points or know that you do but don’t know how many, you can double-check. Here are the details for each state and territory.

Queensland: You can check online through Transport and Main Roads (TMR) or with a Queensland Government (QGov) account.

New South Wales: You can check your demerit point balance online. You’ll need a MyServiceNSW Account.

ACT: You will need to apply for your Licence History. You’ll need to complete the appropriate form, provide two forms of identification and also pay a fee of $27.60.

Victoria: You can check online if you have a myVicRoads account. You can also check by calling 1300 728 977 or visiting a VicRoads Customer Service Centre and bringing proof of identification.

Tasmania: Call Service Tasmania on 1300 13 55 13 and provide your licence details.

South Australia: You can check online but you’ll need a mySAGOV account.

Western Australia: You can check online. You’ll need to enter your licence number and expiry date.

Northern Territory: You can check your demerit points online. You’ll need your licence number, licence card number and MVR customer ID number. You can also call 1300 654 628.

Cover image source: Jakub Krechowicz/Shutterstock.com

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