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.
What is a cover note for car insurance?
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.
What is a car insurance cooling-off period?
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.
How to get a cooling-off period for your car insurance?
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.
What are other cover note alternatives?
Besides the cooling-off period, there are some other alternatives to the car insurance cover note in Australia. Some of these options include:
- A pay-as-you-drive car insurance policy. With this policy, you get all the benefits of comprehensive car insurance, but only pay for the kilometres you drive. This policy option may help you if you’re in two minds about a particular policy before you make a final decision.
- Opt to pay your premiums in monthly instalments and cancel the policy when you no longer need it.
- If you haven’t decided which policy suits you best, consider adding your car to your family’s existing insurance policy. This will give you cover for the time being until you make up your mind.
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.