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What is cover note insurance?

Cover note insurance provides short-term protection for your car. It gives you time to choose a policy and requires no upfront payment. However, if you need to make a claim before taking out a regular policy, you’ll have to pay the cost of your cover note insurance before claiming.

Is cover note insurance for cars still available?

Cover note insurance was once common for car buyers in Australia, but now they’re generally only offered by some insurers and brokers. While insurance companies typically don’t offer cover note insurance, most insurance policies have cooling-off periods which allows you to cancel your policy during this period and receive a full refund (provided you haven’t made a claim).

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Deciding which car insurance you’ll need

Cover note insurance isn’t as available as it once was, but our online comparison tool makes it easy to compare car insurance. Simply enter your car’s details, answer a few simple questions and decide which type of car insurance you want. The four main types of car insurance include:

Comprehensive car insurance

Comprehensive covers costs for both your vehicle and any other involved – regardless of fault. It’s the highest level of car insurance available and also covers your car if it’s stolen or damaged by fire, storm or hail.

Third Party Fire & Theft insurance

This is similar to Third Party Property insurance, but will also cover the costs if your vehicle is stolen or damaged by fire. Be aware that it still won’t cover costs if you cause an accident or any damage.

Third Party Property insurance

If you cause damage to another vehicle or property, this insurance will cover those repair costs. Note that it won’t cover the costs of any repairs your car or property if you’re at fault.

Compulsory Third Party (CTP) insurance

As the name suggests, CTP insurance is compulsory for all registered drivers. This insurance is designed to cover death and injury for other people if you’re involved in an accident while behind the wheel.

Frequently asked questions

How does cover note insurance work?

Cover note insurance was originally designed to provide new car owners with temporary cover. The idea was to protect your car in the short-term (such as driving it home from the place of purchase) until you decide which car insurance provider and policy to insure your vehicle with.

Is cover note insurance the same as a cooling-off period?

No – cover note insurance isn’t the same as cooling-off periods. While both ensure that your car is protected from the point of purchase, there are some key differences.

Cover note insurance gives you short-term cover until you purchase a more permanent policy. You don’t pay upfront costs for cover note insurance and it’s designed to give you time to weigh up your insurance options. Conversely, a cooling-off period isn’t something you purchase, but is included when you take out car insurance. If you change your mind and haven’t made a claim, it allows you to receive a refund for the cost of your insurance within an agreed timeframe (Australians are offered a minimum of 14 days).1

When you purchase car insurance after obtaining cover note insurance, that policy is also subject to a cooling-off period.

Are there any short-term car insurance options?

Car insurance providers in Australia typically don’t offer cover for periods less than 12 months, meaning it’s difficult to find short-term car insurance. You always have the option of cancelling a policy – even after a cooling-off period – but this can attract cancellation fees.

You may also choose to pay your premiums monthly rather than annually, but keep in mind that some insurers will charge you more to do this.


1 Australian Securities and Investments Commission (July 2009) – ‘Factsheet: Buying Insurance’ Accessed October 2019

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