Cover Note Car Insurance

Find out how cover note car insurance worked and what your alternatives are to this type of cover today with Savvy.

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, updated on February 15th, 2024       

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Car Insurance Banner - Couple signing their car purchase and cover note contract at a dealership.

In years gone by, cover notes were a useful way to cover drivers who hadn’t quite decided on which car insurance policy they wanted to buy. While they’re essentially unavailable in Australia today, you may still be wondering how they used to work.

You can have your cover note car insurance questions answered right here with Savvy. Find out how they worked and what your modern-day coverage options are all in one place with us today.

What is cover note car insurance and how did it work?

Cover note car insurance was a temporary insurance solution in Australia which provided immediate coverage to drivers, in most cases until a comprehensive or third party policy could be issued. This type of insurance also came with no upfront payments, although you would have to pay for it if you intended or needed to use it. If you went on to buy another policy, you could simply allow your cover note insurance to expire.

A cover note would typically provide basic liability coverage which protected you against third party claims in the event of an accident. It allowed drivers to operate their vehicles with a level of coverage while still waiting to choose their policy or for their application to be processed.

Is cover note car insurance still available in Australia?

No – cover note insurance is no longer available for purchase in Australia, as alternative coverage options have been introduced to offer protection for short-term insurance needs. Because of this, you won’t be able to buy a cover note insurance policy online with your insurer.

Therefore, if you require short-term or temporary car insurance, it’s worth comparing your options with different providers to help you explore the options available which may meet your specific requirements. Different options may be available in different areas, such as car insurance in New South Wales and Victoria compared to Western Australia, so consider what you may need for your vehicle before you buy.

What car insurance options are available in Australia today?

In Australia, there are several car insurance options available to meet different needs and preferences. These options include:

  • Comprehensive car insurance: this can provide coverage for damage to your own vehicle as well as damage to other vehicles and property. It’s the highest level of cover available in Australia and typically costs the most as a result.
  • Third party property damage (TPPD) insurance: this can cover damage caused by your vehicle to someone else's property, such as their vehicle or home, but doesn’t cover damage to your vehicle in at-fault incidents.
  • Third party fire and theft (TPFT) insurance: this type of insurance can cover damage to other people's property as well as theft or fire damage to your vehicle. However, it also doesn’t cover damage to your vehicle from at-fault accidents.
  • Compulsory third party (CTP) insurance: this insurance is mandatory in Australia and offers cover for personal injury or death caused by your vehicle to other individuals. It doesn’t cover any property damage, for you or other drivers.

However, if you’re looking specifically for a short-term coverage option, you may look at one of the following forms of coverage:

  • Buy a policy and pay monthly premiums: by purchasing a standard car insurance policy and setting your premium payments on a monthly schedule, you can cancel it when you’re ready to switch. It’s important to be aware of any cancellation fees which may apply.
  • Pay-as-you-drive insurance: under this type of agreement, you only have to pay based on the distance you drive throughout the policy.
  • Add yourself to an existing policy: you may be able to add yourself to an existing policy, such as your partner’s, parent’s or friend’s cover, if you’re driving their car for a short time and have yourself removed afterwards.
  • Rent a car: by renting a vehicle, you can determine the period you need to be covered for and drive it (with coverage) until you’re ready to return to your current or new car with a formal policy.

It's important to compare different policies and coverage options to help you choose the one that best suits your needs and budget.

What’s the difference between cover note insurance and a cooling-off period?

In contrast to cover note insurance, a cooling-off period is a timeframe during which you can cancel your newly purchased car insurance policy and receive a full refund (provided you haven’t made any claims in that period) if you change your mind.

A cooling-off period is usually between 14 and 30 days, depending on the insurance provider and the policy terms. It allows you to review policy details, consider other options and make an informed decision on whether you need to change your policy, even after you’ve purchased your car insurance policy.

Cooling-off periods have essentially replaced the need for cover note car insurance in Australia, as they enable drivers to buy a policy quickly and, if they change their mind and decide to go with something else, receive a full refund, with no further charges typically required from the policy.

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