Car Insurance Cover Notes

What are car insurance cover notes and how do they work? While Australian insurers no longer provide cover notes, you can get similar coverage as part of the ‘cooling off period’ of your policy.

What is a car insurance cover note and how do I purchase it?

Cover notes were originally introduced by car insurance companies to provide temporary or interim cover for car owners until a formal policy was purchased. For instance, cover notes were sometimes used to protect people who bought a car then drove it home, prior to deciding on which car insurance provider to go with.

Despite once being a popular feature offered by insurers, car insurance cover notes are no longer offered by Australian insurance providers.

As an alternative, insurers may offer a ‘cooling-off period’ that allows customers a set amount of time to change their mind after purchasing an insurance policy without financial penalty.

What is a car insurance cooling-off period?

Cooling-off periods exist for many insurance products under Australian law to give consumers time to study their policy and ponder their options before becoming locked in financially.  If you enter into a contract with an insurer but change your mind or decide you no longer want cover, you have a period of time whereby you can cancel your policy and receive a full refund called the cooling-off period.

You will generally be able to claim your refund as long as your policy is cancelled within the set cooling-off period and you have not yet made a claim. You should typically not receive fees or charges from your insurer in this time frame. It’s worth noting you may also be protected by the cooling-off period if you make certain changes within your existing policy.

The cooling off period for consumers is typically a minimum of 14 days, according to the Insurance Council of Australia. In saying this, you should always check the time frame with each individual insurer by reading the Product Disclosure Statement (PDS) of your particular policy.

How do I get temporary car insurance cover?

If you are looking for coverage in the interim before you lock in a policy, you could look to make use of a provider’s cooling-off period. To do this, you could decide what type of policy you want (comprehensive, third party or third party fire and theft), look for a policy with a suitable cooling-off period and apply.

If you are accepted, you will be covered from the commencement date listed on your certificate of insurance. You can then cancel the policy if you change your mind within the cooling-off period. Remember to read the PDS to understand the terms and conditions of the cooling-off period including the steps to cancel should you choose to. Of course if you decide you’re happy with the policy and the total costs, you may decide to remain with the provider for the entirety of the policy term.

It is worth noting you are usually only able to claim your refund if you did not make any claims. Administration fees could apply when cancelling, so check the PDS.

Compare car insurance policies

If you are in the market for a new car insurance policy, you can compare over 50+ policies with Canstar.

The comparison table below displays some of the policies currently available on Canstar’s database for a 30-39 year old male seeking cover in NSW without cover for an extra driver under 25. Please note the table is sorted by Star Rating (highest to lowest) followed by provider name (alphabetical) and features links direct to the providers’ website. Use Canstar’s car insurance comparison selector to view a wider range of policies.

Cover image source: (Shutterstock)

Original article published by Regina Collins on 20 February 2018

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