Every Australian driver starts with a clean slate of zero demerit points. Break a road rule, whether it’s speeding, running a red light or using your phone at the wheel, and those points start to stack up. Most drivers know that enough points can cost you your licence. What’s less understood is what those points can do to your car insurance.
The short answer is: it depends on your insurer. Some weight demerit points heavily, while others barely consider them. What almost all insurers do care about is whether those points led to a licence suspension and whether you disclosed your driving history accurately.
Importantly, many insurers are more concerned about a licence suspension than the actual number of demerit points on your record.
Read more: Navigating the demerit point system in Australia
How does the demerit point system work?
Demerit points are applied by state and territory road authorities for traffic offences such as speeding, mobile phone use and red-light offences. Accumulating too many points can lead to a licence suspension, which is where insurance consequences often begin.
Because demerit point penalties and thresholds vary between states and can change over time, drivers should check their local road authority for the most up-to-date information.
In most states, demerit points remain on your licence for three years from the date of the offence. Victoria is the exception, with points remaining active for four years.
Do demerit points actually affect your insurance premium?
The honest answer is: not always. It varies significantly between insurers. Canstar contacted several of Australia’s largest insurers and found a surprisingly wide range of approaches.
| Insurer | Approach |
| QBE | Assesses risk on a case-by-case basis and may consider demerit points as part of overall pricing. |
| Allianz | At the time of Canstar’s research, Allianz stated that demerit points were not collected for comprehensive car insurance pricing, although they were considered for CTP insurance. |
| IAG (NRMA, CGU) | At the time of Canstar’s research, demerit points were not a factor in determining comprehensive car insurance premiums. |
| Suncorp (AAMI, GIO) | Focuses more on licence status. Losing your licence may result in a higher-risk classification and additional excesses. |
| Youi | Assesses demerit points on a case-by-case basis and may adjust premiums accordingly. |
The key takeaway is that even when demerit points don’t directly increase your premium, the consequences of those points often do. Licence suspension is a significant risk factor for many insurers and can result in higher excesses, higher premiums or difficulty obtaining cover.
The one area where demerit points almost always count: CTP
Compulsory Third Party (CTP) insurance is where demerit points most reliably affect your wallet. In New South Wales, where CTP (also called a Green Slip) is purchased separately rather than bundled into registration, demerit points can directly affect your premium.
Canstar modelled the impact using the NSW Government’s Green Slip Price Check tool in March 2026, based on a Honda Civic with two drivers in their 40s living in the Parramatta area.
| Demerit points | Average CTP premium (NSW) |
| 0 points | $598.83 |
| 1-2 points | $747.32 (+$148.49) |
| 3-4 points | $808.30 (+$209.47) |
Source: Canstar, using NSW Government Green Slip Price Check tool, March 2026.
Even one or two demerit points, perhaps from a single phone-use infringement, can add more than $100 to your annual Green Slip premium. Drivers with three or four points could pay more than $200 extra per year before any impact on comprehensive cover is considered.
Read more: Comprehensive car insurance
Do you have to tell your insurer about your demerit points?
Yes. Under Australian insurance law, you have a duty to answer accurately and completely when an insurer asks about your demerit points or driving history. Providing false or misleading information can jeopardise your cover.
If you’re not honest about your driving history and later need to make a claim, your insurer may reduce or refuse the payout entirely. The cost of a slightly higher premium is usually far less than the cost of a rejected claim.
What other risk factors do insurers consider?
Demerit points are only one part of the risk picture. Insurers also consider factors such as:
- Age and driving experience
- Claims history
- Vehicle type and value
- Where the vehicle is kept overnight
- Annual kilometres travelled
- Previous licence suspensions or cancellations
Some insurers also offer discounts to drivers who maintain a claim-free record over a long period.
The good news is that insurers generally assess driving history over time. A sustained period of safe driving can gradually improve your risk profile and help reduce premiums.
Read more: Guide to find the best car insurance in Australia!
Tips to keep your premium in check
Shop around: As insurer responses show, not all providers treat demerit points the same way. Comparing multiple quotes can reveal significant differences.
Always disclose honestly: Never provide inaccurate information on an insurance application. A rejected claim can be far more costly than a higher premium.
Maintain a clean driving record: Points eventually expire, and a clean record over time can help lower your risk profile.
Consider a telematics policy: Some insurers offer usage-based policies that reward safe driving behaviour with lower premiums.
Understand double demerits: Some states apply double demerits during holiday periods, meaning a single offence can have a greater impact on your record.
Review your excess options: Choosing a higher voluntary excess can reduce your annual premium, although it means paying more if you make a claim.
Comments
New Comment