What is the effect of accumulating demerit points on car insurance premiums?

Accumulating demerit points can indeed lead to an increase in car insurance premiums. Insurance companies often assess a driver's risk based on their driving history, and having a record with multiple demerit points typically indicates a higher likelihood of being involved in accidents or traffic violations. As a result, insurers may view drivers with a high number of demerit points as higher-risk clients, which can prompt them to raise premiums to mitigate the greater risk they are taking on. This aligns with the general practice in the insurance industry, where a poor driving record directly correlates with higher costs for coverage.

On the other hand, having no effect on premiums doesn't reflect the reality of how insurers evaluate risk, and neither does the idea that it could lead to a decrease in premiums. Premiums might be particularly influenced by demerit points for drivers of all experience levels, not just new drivers. Thus, the accumulation of demerit points consistently triggers a reassessment of risk that tends to result in higher insurance costs.