Guest post by Lucy Mitchell
Demerit points might seem like a slap on the wrist for a minor traffic mistake — but they can come back to hit harder than many drivers expect. While it’s easy to think of them as just part of a fine or warning, they can actually play a bigger role when it comes to your car insurance.
Insurers don’t just look at the car you drive or where you live. Driving history, including any active demerit points, may be factored in when assessing your level of risk. That means a few small errors on the road could quietly influence what you pay — or whether you’re even eligible for certain policies.
In this guide, we’ll break down how demerit points work, when they can affect premiums, and how to avoid getting caught out. With the right info, you’ll have more control over your coverage, your costs, and your peace of mind.
What Are Demerit Points and How Do They Work?
Demerit points are part of a national system designed to encourage safe driving across Australia. When a driver commits a traffic offence — like speeding, running a red light, or using a phone while driving — points are added to their licence.
Each state and territory has its own rules around how many points can be accumulated before penalties apply. For example, full licence holders in most states can receive up to 12 points over a three-year period. Exceeding that limit can lead to licence suspension, fines, or mandatory driver education.
Points remain active for a set time, usually three years from the date of the offence, and they reset automatically after that period. However, if offences keep stacking up, the consequences grow quickly. Understanding how points work in your state helps avoid long-term trouble both on the road and when it’s time to renew your insurance
Do Demerit Points Affect Your Car Insurance Premium?
Demerit points won’t always cause an immediate jump in your car insurance premium – but that doesn’t mean they go unnoticed. Insurers consider your driving history when assessing how much of a risk you pose behind the wheel.
Each provider uses its own set of underwriting criteria. While one might overlook a single offence, another may flag multiple points as a sign of risky behaviour. Over time, accumulating demerit points can shift how insurers view your profile, potentially leading to higher premiums or limited policy options.
It’s not just about how many points you have, but the pattern they reveal. Frequent infractions suggest habits that increase accident risk, and insurers may price that in. Understanding how your record is seen through the insurer’s lens helps explain why two drivers with the same car might pay very different amounts for coverage.
When Can Demerit Points Lead to Increased Premiums?
While a single speeding ticket might not move the needle, multiple offences or serious breaches can quickly impact what you pay, or whether you’re offered cover at all. A licence suspension or cancellation triggered by excessive demerit points is a red flag to insurers. It signals ongoing risk and often results in significantly higher premiums.
Some providers may even decline to renew a policy if a driver’s history includes repeated offences. This is especially true when those incidents occur close together or suggest unsafe habits. Even if coverage is offered, the cost may climb sharply.
Insurers typically reassess a driver’s risk profile at renewal time. That’s when a poor driving record can come back to bite, particularly if there’s a history of accumulating points. Staying within your state’s point limit isn’t just about keeping your licence. It’s about keeping affordable insurance within reach.
The Importance of Disclosing Your Demerit Point Status to Insurers
When it comes to car insurance, honesty isn’t optional, it’s essential. Many drivers don’t realise that failing to disclose previous offences, suspended licences, or current demerit points can lead to serious consequences.
Insurance applications often include questions about driving history. If the answers don’t match reality, any future claim could be denied, even if the incident isn’t related to past behaviour. Worse still, a policy might be cancelled altogether, leaving you uninsured when you need protection most.
Not every insurer asks about demerit points, but many do. If you’re unsure, take time to read each question carefully and check the fine print before submitting. Full disclosure builds trust and ensures your cover stays valid. A clean record helps – but so does transparency. Being upfront about past mistakes can still lead to competitive pricing with the right provider.
How to Check Your Demerit Points Balance
Keeping track of your demerit points is easy — most states and territories in Australia offer online portals to help drivers stay informed. For example, in New South Wales (NSW), Victoria (VIC), Queensland (QLD) and Western Australia (WA), you can log onto the respective transport authority websites and check your point balance in just a few steps.
These portals often provide a detailed breakdown of your current points, any traffic violations, and upcoming deadlines for payment or action. Simply enter your licence details to access this information.
By staying proactive, you can avoid surprises when it comes time to renew your car insurance. If you notice your points accumulating, consider taking steps to reduce them or improve your driving habits. Checking your demerit points regularly is a smart way to stay on top of your driving record and ensure your insurance remains in good standing.
Tips for Maintaining a Clean Driving Record
Maintaining a clean driving record is the best way to avoid accumulating demerit points – AND it can also save you money on car insurance. Here are a few tips:
- Obey speed limits: Stay within the posted limits to avoid penalties and fines.
- Minimise distractions: Focus on the road and avoid using your phone while driving.
- Take refresher courses: Consider defensive driving courses to sharpen your skills and reduce the risk of infractions.
In addition to avoiding points, safe driving can help you earn rewards. Many insurers offer benefits such as no-claim bonuses, lower excess, and discounted premiums for drivers with a clean history. Over time, these rewards can add up, providing financial savings and peace of mind.
For those in New South Wales, maintaining a clean record can also impact your NRMA CTP green slip insurance, as a good driving history can ensure a smoother, more affordable policy renewal.
Safe driving isn’t just about following the rules, it’s about protecting your future premiums too.
At the end of the day, understanding how your driving behaviour affects your insurance premiums empowers you to make smarter, safer choices on the road. Regularly checking your demerit points and staying informed about how your driving history impacts your coverage will help you avoid surprises and potential premium hikes. If you’re unsure, don’t hesitate to reach out to your insurer for clarification. Armed with this knowledge, you can drive with confidence, knowing that you’re making decisions that keep you safe on the road — and are good for your wallet, too.
