What happens if you’ve just bought a brand new car but haven’t decided which car insurance policy you want? To fill this gap, insurers would offer something called a car insurance cover note. But, what is a cover note for car insurance and can you still purchase one? Cover notes are essentially stop gaps giving you cover before you buy a full policy. Unfortunately, they are no longer offered, but there are alternatives to car insurance cover notes.
Until some years ago, car insurance cover notes were offered by insurance companies as temporary cover to drivers who hadn’t chosen a policy yet. These notes were used by drivers who had either just purchased a new car or were taking time to decide among different insurance providers.
Despite their high demand and popularity, cover notes are no longer sold by insurers in Australia. However, you can still get the benefits that the insurance cover note for a new car used to provide, with the help of some other features offered by insurers.
A part of almost every insurance product in Australia is a cooling-off period. They are offered by insurance companies to give customers time to study their options before getting locked in with any specific policy.
The cooling-off period is a specific window of time after you enter into a contract with an insurer, during which you have the option to change your mind and cancel the policy. You’ll receive a full refund and won’t have to pay any cancellation fees. Moreover, you can also choose to make certain changes to the policy during the cooling-off period at no extra cost.
It’s important to note, however, that you can only benefit from the cooling-off period if you make a decision within this period and have not yet made a claim on the policy.
Typically, the cooling-off period lasts for 14 days, but it may differ based on your insurer. Check with your insurer, or read the Product Disclosure Statement (PDS) of your policy to confirm the time-frame of this period for your specific policy.
Technically, you don’t need to separately apply for the cooling-off period as it should already be a part of your policy. If you plan on utilising the cooling-off period, check the policy terms around this feature before choosing a policy. You can then decide what type of insurance cover you’re looking for, for example, comprehensive, third-party or third party fire and theft.
Your cover will be effective from the date of commencement listed on your insurance certificate, which is typically the date you signed up. You’ll be given a policy number that you can use to make a claim if the need arises.
If you haven’t made a claim and decide to cancel the policy during the cooling-off period. You can do this at no extra cost and without any hassles during the cooling-off period.
Ensure you read the PDS carefully before signing up for car insurance. It will help you get a clear understanding of the terms and conditions of the cooling-off period and the steps you need to follow to cancel the policy during this period.
Of course, if you’re happy with the cover and the costs incurred, you can continue with the same insurance for the rest of the policy term.
Besides the cooling-off period, there are some other alternatives to the car insurance cover note in Australia. Some of these options include:
Using a temporary cover note for car insurance option was extremely popular a few years ago, and the need for this still exists. So, if you’re looking for an insurance policy that provides temporary cover, compare a range of suitable options on our website.
Disclaimer
This article is over two years old, last updated on November 23, 2020. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent car insurance articles.
