We answer our reader’s questions about car insurance: December edition

You asked, we answered: it's time for another installment of our ongoing reader Q&A series. (Consider this our special holiday edition.)

December is usually a slow month for the auto industry. No one wants to go out and buy a car when the weather’s ugly.

But it’s still a busy time for us. People are doing their end-of-year insurance renewals, and they have a lot of questions.

Below, we’ve compiled all the inquiries we’ve received in the past month.  If you have your own burning question about auto insurance, you can contact us at [email protected] and we’ll make sure to include it in next month’s roundup. (But don’t worry, we get YOU the answer the day of.)

When is having UBI (Usage-based insurance) better than a standard auto insurance policy? What are the pros/cons of each?

Usage-based auto insurance is only better if it actually helps get you a discount on your auto insurance.

Let’s back up for a minute. UBI means you have to install a telematics device in your vehicle that tracks your driving. Usually, four key metrics are captured: accelerating, braking, cornering and your speed. For more information, check out our page on UBI here.

Good driving means insurers who use a UBI program will give you a discount. Insurers also argue it makes for better drivers: a study from 2011 found that there was a 40% drop in crash risk for new drivers who had a UBI device in their car, versus those who didn’t.

Now, the downsides. First and foremost is privacy. You have a device issued by a business that can track how you operate your vehicle. To be clear, though, UBI devices don’t log your location.

Second, depending on your province, UBI data can be used against you. In Ontario, insurers cannot use data to penalize drivers. But in Quebec they can. You should be aware of the rules in your own province before you make a decision.

Are there things I should tell my insurer as soon as my personal situation changes (e.g. my commute distance changes, I install winter tires on my car, I change where I park my car overnight, etc.)?

Yes to all of these questions. Anytime something material changes — like how much you drive, where your car is parked or any additions like winter tires or a new security system — you should tell your insurer.

And this isn’t something you should casually shrug off. If you say that you drive 5,000 kilometres a year, but your odometer suggests that it’s more like 20,000, you’re at risk of having a claim denied.

Being as accurate and up-to-date with your insurer is critically important. It’s sad to say, but insurers will jump on any opportunity to deny a claim. Inconsistent data is one of them. If your circumstances change, call your insurer!

I am the registered owner of a vehicle.  Do I have to be listed as the primary driver of the car or can someone else be listed as the primary driver?  Do I have to be listed as a driver on the car if I have a licence?  What about if I don't have a licence?

Whoa, three part question. Let’s break this down.

First, legally, you do not have to be the owner of the vehicle to be the primary driver. But there is some important information you need to know if you go down this route. First, some insurers could potentially refuse to insure you depending on the situation. For instance, if you live in a house with two people, and you’re already insured as a primary driver on one vehicle, you won’t be able to insure yourself as the primary driver on the second. There are also a couple of other scenarios where insurers may reject your request. It’s important to call and ask your insurance company if they’re willing to insure you in the first place — and it wouldn’t hurt contacting a few others if they say no.

Some insurers may allow you not to be listed as a driver, but they’re going to have a lot of questions about why. Also, understand that if you ever do drive it and suffer an accident, you won’t get a penny — and the premiums of the person who is insured could soar.

This applies whether or not you have a licence.

I've heard that I need to register a car before I can have it insured, but I've also heard that I need to have the car insured before I can register it.  How can I do both when one seems to depend on the other?

This depends on how you buy your vehicle. If you buy your vehicle from a dealership, they’ll take care of registration on the spot. You can then take those details to your insurer and get insurance.

If you buy a used vehicle privately, you’ll need to get it insured before you can go and get it registered under your name. Insurance companies know this is usually a quick, transitionary period, so they’ll issue you a temporary print-out form until your pink slip arrives.

Yes, on the surface, you’ve found a contraction of the registration and insurance regime. But you’d only really find yourself in the above two situations when it comes to this. The system isn’t exactly intuitive, but it works.

I have just acquired a vehicle, but I don't have a licence.  1. Do I have to be licensed to register the car?  2. Does the car need to have licence plates on it if I'm not driving it?  3. Can I insure it with just comprehensive coverage even if I don't hold a valid licence?

Boy, you guys sure like your multi-part questions. Here we go:

Yes, you have to be licensed (or have a registrant identification number, which is basically the ground level of a licence).

Yes, licence plates have to be visible at all times.

It depends, some insurers may allow this depending on your circumstances.