Car insurance cover notes

What is a car insurance cover note?

Cover notes were no-cost, temporary insurance policies, originally introduced by car insurance companies to provide interim cover for car owners until a formal policy was purchased. Cover notes are no longer available in Australia. They have been replaced by instant car insurance: where someone pays for a policy, typically over the phone or online, and that policy is immediately activated.

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Can I get cover note insurance?

While the old no-cost cover note insurance policies are no longer available, it may be possible to arrange something similar – but you will likely have to pay upfront for the policy and later cancel it and claim a refund. Nowadays, all car insurance policies must have a cooling off period during which a policyholder can cancel their cover and are entitled to receive a full refund. This period allows you to change your mind without financial penalties even after you’ve bought into a policy. It’s important to remember that there could be a delay between cancelling your policy and receiving the funds back in your account. Cooling-off periods may differ between insurers, too. Be sure to read all important documentation, such as the product disclosure statement, before taking on or cancelling any policies.

Explore further → Different Types of Car Insurance Explained

What is a car insurance cooling-off period?

An insurance cooling-off period is the time when you’re allowed a full refund if you cancel or switch your policy. This period can be between 14 to 31 days after you’ve purchased an insurance policy and can vary depending on the provider. Under the Australian Consumer Law,  insurance cooling-off periods exist to give consumers time to study their policy and consider their options before becoming locked in financially.

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 can vary depending on the state or territory you’re in and which provider you choose. 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 before you lock in a policy, you could 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) which has 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 that 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 for any potential cancellation fees.

What are other short-term car insurance policies?

If you’re wanting temporary car insurance but don’t want to rely on the cooling-off period, you could take a look at pay-as-you-drive car insurance (if you’re planning to drive 15,000 kilometres or less in a year). This type of car insurance provides the same coverage as your traditional comprehensive car insurance at a reduced premium and could be a good alternative to temporary insurance.

Explore further → Pay as you drive car insurance

You could also take a look at pay-by-the-month car insurance that allows monthly instalments instead of an annual payment. You could then cancel your insurance when you no longer need it. However, these types of car insurances could have higher monthly costs and cancellation fees, making it worthwhile to thoroughly compare and explore your options when looking for a short-term or temporary car insurance.

Learn more → Short-Term Car Insurance

Comparing car insurance policies

Like all things, it is a good idea to compare your car insurance policy options before signing with an insurer. If you are in the market for a new comprehensive car insurance, you can compare your options with Canstar.

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