Demerit Points and the NOT Relationship
It amazes me how many people routinely ask if I can save their points. I point out that they’re likely hiring me to keep their insurance low (and while their nodding yes) I point out that demerit points DO NOT AFFECT INSURANCE PREMIUMS!
People get that look like someone just told them the sky was red. Whether they’re 16 or 60, they, like so many others do not understand the demerit point system. And in most cases have simply confused it with the insurance star rating system.
To clear this up, let’s go back to basics and perhaps use some examples most people are familiar with.
Insurance companies base their premiums on the level of risk a proposed driver poses to them. They use mountains of data to determine this. Years of statistics, actuaries forecasts, trend spotting, and sometimes even your credit rating. In fact, your insurance premiums are very much like a credit rating. Take the following example:
You just turned 18, have dropped out of school and not working. You apply for a credit card. You’re obviously at a greater risk than someone your age who is working, or even in University on some form of job track. Of the 2 people above, who would you feel more comfortable lending money to? And if you did loan money to either, who would you charge more interest to make it worth it or to try and reduce the risk?
Insurance is based on a similar risk assessment. People with no tickets fare better than people with tickets. People with tickets, are like the 18 year olds without a job, they pose a higher risk and therefore pay a higher premium.
Now that’s pretty simple to understand and you’ll note, I didn’t say anything about demerit points.
There is some sense in thinking that offences which carry demerit points could be viewed as more serious and therefore attract an even greater premium. It sounds logical but it isn’t. Take for example any novice driver violations; They carry no demerit points, many people simply pay them, and well before they have to renew their insurance, they get a letter from the Ministry of Transportation informing them they are suspended for 30 days (the time which starts when they surrender their license). In addition, the time they have to wait until they can do their next road test starts over.
For the purposes of illustration, imagine you’re an insurance company and you have 2 insureds. Both are 18 and have only 1 conviction. 1 has a 16 over speeding ticket and the other a G2 alcohol above zero offence. The 16 over speeding ticket carries 3 demerit points, the alcohol offence carries none. Which would you consider a bigger risk? The driver who sped slightly or the driver who drank before he drove when he wasn’t supposed to?
As you navigate through the complex path of your driving record, you’ll notice that there is a certain logic to things. For instance, as a G2 driver you need to accumulate 6 points for an interview and 9 points for a suspension. Consider, for the purposes of this example, that the seriousness of the alcohol offence equals 3 16-29 over speeding tickets. If convicted of the 3 speeding tickets, you’d be suspended for 30 days. Just like 1 G2 alcohol offence got the same result. In the case of someone with 3 of the above speeding tickets, saving points would be a benefit particularly because the driver would be able to keep their license. The insurance may go up but a different end was achieved.
The simplest way to explain how an insurance company would assess a conviction is to think of 3 levels of classification. They are minor, major, and serious. Now, not all insurance companies use this type of classification but it seems to be the most common, so for the purposes of what we’re discussing this is what we’ll use. Also, because every insurance company has their formula for calculating risk and different methods for classifying an offence, it is important to note we are taking a heuristic approach to this. There may sometimes even be different criteria within thesame insurance company so you’ll have to try to understand this as the gist of things.
Usually speeding tickets are divided as follows:
Speeding 1-29 over the limit – Minor Infraction
Speeding 30-49 over the limit – Major Infraction
Speeding 50+ – Serious Infraction
In the above example, you’ll note that anything between 1 and 29 is a minor. From a demerit point perspective:
Speeding 1-15 over the limit – 0 Demerit Points
Speeding 16-29 over the limit – 3 Demerit Points
Notice that although one offence has demerit points and one doesn’t, it doesn’t change how your insurance company looks at it. Why then do people focus so much on demerit points when it’s their insurance premiums that should be the real worry.
To wrap up the insurance aspect, understand that if you’re a defendant and you’re being sold on saving demerit points, ask why? There are situations when saving the demerit points is the smart thing to do. The important thing is to know when.
With the above in mind, lets take a look at demerit points. Demerit points are what the Ministry assess against you for traffic offences. Here are some popular misconceptions.
You don’t lose points, you accumulate them which means you start with 0. When someone says “I have all my points”. They’re wrong or their driving record is in really bad shape.
Demerit Points will be on your record for 2 years retroactive to the offence date. This means that if a case took longer than 2 years to resolve, those points are recorded retroactively. They will have been on your record even if they are not anymore. Most people check their driving record after a case finishes. They see the conviction and no demerit points. Having read the start of this blog article, you know that the conviction is what the insurance company will use but here is a new fact to add. Convictions are on your record for 3 years (HTA offences, Criminal offences are longer).
Consider then, that not only do insurance companies not consider demerit points but that the conviction stays long after the demerit points have been removed. Lets look at another example.
Joe Defendant gets a speeding ticket (lets say 80 km/h in a 60 km/h zone) on January 1, 2009. He files his ticket and goes to court.His first court date is January 1, 2010 but the case is delayed. It comes back on January 1, 2011. On January 1, 2011 Joe is convicted of speeding at the full speed. A week later he gets his driving record. It shows the conviction but no points.
Now we know Joe isn’t in the clear. He may even think he can argue that this happened over 2 years ago and insurance companies can only use it for 3 years and so he thinks he should have 2 years off that time. He would be wrong in that assessment. The 3 year clock starts when the conviction is entered. After all, his insurance company could legitimately argue that the presumption of innocence, precluded them from charging the extra premium. That would go against what the presumption was intended. So if you’re convicted, points or not, your insurance company will have a 3 year shot at you.
A little not-so-known fact:
If you receive more than 1 ticket in a single stop and a couple have demerit points (example: Stop sign & a Seatbelt offence), you only get demerit points for the highest carrying ticket. In this example it would be the stop sign. So you would get 3 points, not 5. This is another example how the demerit points don’t affect your premiums but rather, the convictions do.
In summing up the insurance aspect of things, as a defendant, rather than researching how many points there are for the offence, find out how your insurance company will classify it. This may be contained in your policy, their web site, or an anonymous phone call. Whatever route you take, find out the big picture. How much will my premiums increase? Am I protected by a driver forgiveness program? This will help you make an informed choice about what you need to do with your ticket and will also help your legal representative manage your expectations.
In dealing with the demerit points system itself, lets quickly summarize how it works.
When you accumulate enough points, your license gets suspended for 30 (60 days or 6 months for subsequent suspension for NOVICE drivers) days. The time period starts from when you surrender your license. So if you waited 30 days to surrender your license, the suspension is for 60 days total. Enough points for a suspension is:
a) Fully licensed driver – 15 demerit points (30 day suspension)
b) Novice driver (G1,G2,M1M2) – 9 demerit points (60 day suspension)
When your license is reinstated your demerit point total will be reduced to:
Finally, a little over a year ago a regulation was passed that would suspend a novice driver for a conviction for any offence carrying 4 demerit points or more. This would mean that a 30 over speeding ticket would almost definitely be plead out to anything less to avoid the suspension. Something to keep in mind.
I would be happy to answer any questions, fix any typos, or help send some strategic advice based on specific scenarios. Email me at email@example.com.