Your guide to car insurance cover notes and why they're no longer available in Australia.
Are you looking for a car insurance cover note to provide interim cover for your vehicle? Unfortunately, Australian insurers no longer offer cover notes to drivers.
However, the good news is that you can enjoy a similar sort of protection under your policy’s cooling-off period. Read on to find out how.
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What is a cover note?
A cover note is a temporary insurance policy for your vehicle. It is designed to provide short-term car insurance cover for a vehicle until a formal policy is issued. For example, a cover note could be used to cover a vehicle while you drive it home after purchase, before you go on to compare car insurance quotes and purchase a full policy.
Why can't I take out a cover note?
You can’t take out a cover note because Australian car insurers no longer issue cover notes. Though they were once a common feature from most insurance providers, cover notes have been phased out in recent years and the protection they offered has been replaced by car insurance cooling-off periods.
Alternatives to car insurance cover notes
You can receive similar benefits to those provided by a cover note by utilising the cooling-off period that comes with all car insurance policies. A cooling-off period is a period of time, usually between 20 and 30 days after you purchase cover, when you can cancel your policy and receive a full refund.
This allows you to get the interim cover you need and then, if you decide that the policy is no longer suited to your needs, you have the right to cancel your cover.
How do car insurance cooling-off periods work?
Under Australian law, if you change your mind about a general insurance product, including car insurance, you have a minimum 14-day period after purchasing cover to decide whether the policy is right for you. If you decide that you no longer want cover, you can cancel your policy within the cooling-off period and receive a 100% refund of any premium you have paid. You will also not incur any charges or fees from the insurer.
However, take note that in order to be eligible for a refund, you must not have made any claims on your policy. This cooling-off period applies to all new policies. You will also typically get a cooling-off period when changing or adjusting the terms of your existing policy.
Cooling-off periods give you a chance to review your car insurance policy and decide whether it’s right for you. If it’s not a good fit, this is also the perfect time to compare other policy options and find a better deal.
How can I get the temporary car insurance cover I need?
To take advantage of the temporary car insurance cover you can enjoy thanks to your policy’s cooling-off period, follow a few simple steps:
- Decide what type of car insurance you need: comprehensive, third party fire and theft or third party property damage
- Look for a car insurance policy with a suitable cooling-off period for your needs. Check the terms and conditions outlined in the PDS carefully
- Apply for a policy
- Cancel the policy within the cooling-off period and follow the steps laid out in the PDS to get your refund
What conditions should I be aware of?
- You are only entitled to a refund if no claims have been made.
- You are only covered from the commencement date listed on your certificate of insurance.
- Administration fees may apply when cancelling a policy and claiming your refund.
Is my policy effective immediately?
Yes. Once you’ve selected the policy you want and paid your premium, the insurer provides protection from the date you ask for cover to begin. So if you want instant cover, ask for your policy to start immediately. Even if you have not yet been sent your certificate of insurance, you’ll be given a policy number that you can use should you need to make a claim.
Does a cooling-off period give you the same outcome as a cover note?
Yes. This option allows you to purchase a car insurance policy to provide whatever level of cover you need for your vehicle. If you only need that cover for a short period such as a couple of days, you are well within your rights to cancel your policy during the cooling-off period without incurring any financial penalty.
Of course, if you’re happy with the policy you’ve chosen and the cost of cover, you may decide to maintain cover for the remainder of the policy term.
Should I take out temporary insurance or a full policy?
To take advantage of the protection offered by the car insurance cooling-off period, you simply need to purchase a full car insurance policy and cancel it before the insurer’s cooling-off period ends.
If you’re looking for temporary car insurance for a time frame longer than the cooling-off period, check out our guide to short-term car insurance. This can help you compare the options available when you need cover for less than a year, such as:
- Choosing a pay-as-you-drive car insurance policy
- Paying premiums in instalments and then cancelling cover when you no longer need it
- Adding an extra driver to an existing car insurance policy
Each of these options has its own pros and cons, so check the guide for more information.