Skip the auto shop - Our mechanics make house calls

How the Demerit Point System Affects Car Insurance Rates

How the Demerit Point System Affects Car Insurance Rates

The point system in traffic parlance refers to the assignment of "points" or values to each infraction you incur. Car insurance companies evaluate the points instead of each infraction when they calculate insurance rates. The insurance companies therefore have a system that may or may not be the same as your state DMV's points system.

Since car insurance companies have their own methods for calculating your rates after you've had accidents and violations, not every company will penalize you the same. If you've recently seen your rate increase after an accident or violation, you can still compare car insurance quotes for a cheaper rate.

Every traffic infraction for which you’re found “guilty” – such as at-fault accidents or driving under the influence – can be assigned a certain point value if your state has a point system in place. Some tickets, such as a parking ticket, typically do not have points associated with them.

For example, a company may use this type of system:

How Demerit Points are Assigned
Description Points:
First Occurence
Points: Second Occurence Points:
Each Additional Occurence
At-Fault Crash 2 3 2
Not-At-Fault Crash 0 0 0
Driving Under the Influence 1 2 3
No-Charge Violation 0 0 0
Major Violation 4 4 4
Minor Violation 2 1 1
Speeding 3 2 2

Some companies’ rating algorithms are complicated, and some are simple. Most of the algorithms used try to put an insurance point value on each infraction or ticket (regardless of the state driving record point system). Based upon that point value, a different rating factor is use to either raise or lower the rate.

The more points you have on your driving record, the worse your record looks to a car insurance company. But because each car insurer has its own method of evaluating applicants, the points on your driving record will impact the rates you pay for insurance differently. However, it's safe to assume that the more points you have, the more you'll pay.

This article is adapted with approval from carinsurance.com: http://www.carinsurance.com/how-do-points-affect-insurance-rates.aspx

The statements expressed above are only for informational purposes and should be independently verified. Please see our terms of service for more details
Icon-warranty_badge-02

Skip the repair shop, our top-rated mechanics come to you.

At your home or office

Choose from 600+ repair, maintenance & diagnostic services. Our top-rated mechanics bring all parts & tools to your location.

Fair & transparent pricing

See labor & parts costs upfront, so you can book with confidence.

12-month, 12,000-mile warranty

Our services are backed by a 12-month, 12,000-mile warranty for your peace of mind.

Get A Quote

Need Help With Your Car?

Our certified mobile mechanics make house calls in over 2,000 U.S. cities. Fast, free online quotes for your car repair.

GET A QUOTE

More related articles

How to Transfer a Car Title in Idaho
In order to prove ownership of a car, you must have the title. However, when a car is sold, given away or inherited, the title needs...
P2428 OBD-II Trouble Code: Exhaust Gas Temperature Too High Bank 1
P2428 code definition A P2428 trouble code signifies that the PCM has detected a problem in the exhaust gas temperature sensor circuit in bank 1, which subsequently contains the number one...
P0608 OBD-II Trouble Code: Control Module VSS Output "A" Malfunction
P0608 means there is an malfunction in the vehicle speed sensor A control module often due too faulty speed sensor or shorted electrical wiring.


Related questions

Q: Advice on buying the first car

Unfortunately, I don't want to jinx you, but the first car people get is the first car they wreck. I would say get a nice, used Toyota. You pay less, your insurance will be a lot cheaper. As time goes...

Q: Do I need gap insurance?

Gap insurance is designed to cover the difference between what is owed on the vehicle (your car loan) and what the insurance company may pay out in the event of an accident or loss. Any example might be a situation...

Q: what would be the average cost to own my vehicle over a ten year period

Typical "lifecycle" vehicle ownership and operation costs, such as you are inquiring about, are calculated on a 5 year interval. Going out 10 years has too much inherent uncertainly in inflation projections, and the costs of fuel, insurance, and repairs....