How Driving Demerits Will Affect Your Car Insurance

The driving demerit system, to be introduced nationally by the Department of Transport under the Administrative Adjudication of Road Traffic Offences (AARTO) Act, has implications for vehicle insurance that you need to know about.

In August, the Department of Transport gazetted commencement dates for the AARTO Act, including the demerit system. Different sections of the Act will come into effect between December this year and September 2026.

The rollout of the Act, which is already partially operational in some metros, has been beset with legal challenges. However, according to the AARTO website, the Constitutional Court has sanctioned the new system for handling traffic infringements and incorporating a demerit system for drivers. The demerit system will supplement the imposition of fines and other legal procedures related to traffic law violations.

Driving demerit systems have been introduced worldwide to encourage motorists to obey the traffic laws and drive more safely. This is how it will work.

Everyone starts with a blank slate. Infringements are relatively minor violations of traffic laws, whereas offences are prosecutable. For each infringement, between one and five demerit points are added to your licence, depending on the seriousness of the infringement, as prescribed in Schedule 3 of the AARTO Regulations. Offences carry a six-point penalty.

The prescribed thresholds are 15 points for a full driver’s licence and six points for a learner’s licence. When the threshold is exceeded, the licence will be suspended for three months for each demerit point over the threshold. A licence may be suspended twice only. If the threshold is exceeded a third time, the licence is cancelled.

However, points don’t stay on your licence forever. They are reduced by one point every three months, giving responsible drivers the opportunity to clean their record over time. There is also a rehabilitation option whereby, on successfully completing a rehabilitation programme, a driver can reduce his or her demerit score by four points per 12-month period.

In December this year, AARTO will be introduced in 69 municipalities, including major metros such as Cape Town and Johannesburg. Between February and April 2026 the system will be expanded to the remaining municipalities. In September 2026, the points demerit system will be activated.

How it will affect insurance

Many insurers already have ways of monitoring – and pricing for – driving behaviour, including using vehicle tracking systems. They are likely to use the demerit system as an additional way of ensuring that responsible drivers are rewarded with lower premiums while reckless drivers are penalised with higher premiums and even face having their policies cancelled.

Londiwe Mataga, head of governance at Miway Insurance, says there is a direct correlation between driver behaviour and insurance premiums. “Insurers calculate premiums based on risk and the higher your perceived risk of causing an accident, the higher the premium you’ll pay.”

Mataga says that, under the AARTO system, your insurer will have access to your driving record, and traffic violations will likely affect your risk profile. “Enhanced access to driver behaviour data such as demerit points and infringement records empowers insurers to refine risk assessments more accurately. This data enables insurers to develop more precise risk profiles for individual drivers, adjust premiums based on actual driving behaviour, and identify high-risk clients for targeted interventions or potential exclusions,” she says.

To keep premiums low, Mataga says you simply need to drive responsibly, following the rules of the road and avoiding violations. “Driver behaviour is a critical determinant of road safety and insurance costs. Risky actions such as speeding, distracted driving (including mobile phone use), aggressive driving (such as tailgating and rapid lane changes), fatigue, and driving under the influence significantly increase the likelihood of accidents and vehicle damage. Therefore, proactively managing your behaviour on the road is vital,” she says.

Addendum: Since this article was written, the AARTO rollout has been postponed by the Department of Transport owing to a lack of preparedness of some municipalities involved in the first phase of the rollout, scheduled for December 1, 2025. “The Department will soon publish the new proclamation with new staggered implementation dates, with July 1, 2026 being the official implementation date,” it said. This means that the demerit system, initially scheduled for September 2026, is likely to come into effect only in mid-2027.