Do Demerit Points Affect Insurance Rates?
Demerit Points Involve a System of Recording and Monitoring the Frequency and Severity of Driving Offences Incurred By a Driver. The Points Are Applied to a Driving Record By the Ministry of Transportation and Remain For Two Years. Demerit Points Are Irrelevant to Insurance Rating Systems.
A Helpful Guide on How to Understand the Driver's Licence Demerit Point System Used By the Ministry of Transportation
In Ontario, the Ministry of Transportation applies a 'demerit point system' as a means of tracking and monitoring the traffic ticket conviction frequency and severity of drivers. Demerit points, if any, are only applied upon convicted for a traffic violation. A traffic ticket charge that fails to result in a conviction fails to result in any demerit points; accordingly, if you are charged with a traffic ticket offence, you will only receive demerit points if you plead, or are found, guilty of the offence. Successfully fighting the charge saves demerit points.
What to Know
Period That Points Remain Upon Record
Demerit points remain on a driver's record for only two years. The conviction for which the demerit points were acquired remain on a driver's record for three years. Furthermore, there are different dates used for the demerit points record and the conviction record. For demerit points, upon conviction for the offence, the demerit points are applied to the record so to show the date of the charge; however, for the offence record itself, the date of conviction is applied. Accordingly, on the two-year anniversary of the charge, the applicable demerit points 'fall off' the demerit points record and on the three-year anniversary of the conviction, the offence occurrence is removed from the offence conviction record for the driver. For example, if a driver is charged on April 1st 2020 with careless driving, which counts as six (6) demerit points, and the driver is convicted or pleads guilty to the charge on July 1 2020, the six (6) demerit points will be removed from, or 'fall off', the demerit points record on April 1 2022 and the record for the actual conviction will be removed, or 'fall off', on July 1 2023. Of course, any demerit points for convictions subsequent to July 1 2020, will remain on the record until the two-year anniversary date applicable for those convictions.
Irrelevant to Insurance
It is commonly perceived that demerit points affect insurance rating which is incorrect. Demerit points are actually irrelevant to insurance rating whereas insurance companies use a completely different driving record system when determining insurance rates for a driver. With this said, and perhaps the reason for the confusion, insurance companies do review the conviction history of a driver, albeit without attention to the 'demerit points'. Accordingly, whereas a driver will be assigned six (6) demerit points by the Ministry of Transportation upon conviction for a careless driving charge, the insurance company will note that there is a careless driving charge and rate for the presence of the charge itself rather than for the presence of the demerit points. In this way it should be understood that a conviction resulting in demerit points assigned to a driving record by the Ministry of Transportation and an insurance company adjusting rates for the conviction are two different concerns even though both occur due to the same thing - the occurrence of a conviction.
Negotiating Point Reduction
Demerit points are assigned by the Ministry of Transportation following the registering of a conviction by the traffic court. If a driver pleads guilty, or is found guilty, of a charge, the demerit points applicable to the charge are assigned to the driving record. A Prosecutor is unable to alter the applicable points. With this said, it may be possible to negotiate a plea to a lesser charge that comes with less demerit points. For example, when a driver is charged with careless driving, a charge that upon conviction will bring six (6) demerit points, negotiations with the Prosecutor may result in a plea of guilty to a lesser charge such as following too close, which will bring only four (4) demerit points. In this sense, while an affect upon the demerit points may result, it is actually the change in charge that made the difference.
Convictions Occurring Within Another Jurisdiction
If a driver is convicted of a driving offence within another Canadian province, demerit points will be applied by the Ministry of Transportation based just the same way as if the conviction for the driving offence occurred within Ontario. Similarly, if convicted for a driving offence in Michigan or in New York, being states with a reciprocal reporting agreement with the Ministry of Transportation, demerit points will also be applied just the same way as if the conviction occurred within Ontario. Accordingly, regardless of where a driver is located, a driver should obey all traffic laws in the interest of protecting against potential demerit point penalties as well as for safety concerns and the general public regard.
Points Applied Varies
The number of points applied to a driving record depends upon the offence for which the driver is convicted. Serious offences result in more demerit points. Less serious offences result in less demerit points and perhaps zero (0) points for the least serious, minor, offences.
Demerit Point Penalties
The penalty for accumulating too many demerit points depends upon the class of driver and how many demerit points are accumulated. For a fully licensed driver that accumulates between nine (9) points and fourteen (14) points, an interview may be required to discuss continued driving privileges and to review whether the driver's licence should be suspended. If a fully licensed driver accumulates fifteen (15) points or more, a thirty (30) day driver's licence suspension becomes mandatory. For a notice driver, an interview may be required if six (6) points to eight (8) points are accumulated and at nine (9) points or more, a sixty (60) day driver's licence suspension becomes mandatory.
The demerit point system is managed by the Ministry of Transportation as a means to track the frequency and severity of a each licenced driver's driving offences. The demerit point system is independent of insurance rating systems; however, both the demerit point system and the insurance rating system will be affected by the number of, and seriousness of, driving offence convictions that a driver incurs. When too many demerit points are accumulated a driver's licence may be suspended. Interestingly, drivers licenced in Ontario may accumulate demerit points for offences that occur in jurisdictions other than Ontario including all provinces within Canada as well as the states of New York and Michigan as within the United States of America.