An insurance cover note is a non-permanent document that the insurance company gives you. It is proof that consists of all the details of your insurance coverage. You need it as the insurance companies do not immediately issue the final insurance policy. It is a process that takes time and during that time you can make use of this alternative document. It is definitely a great decision as you need evidence that you have bought an insurance policy.
The preparation of a detailed permanent policy takes some time. The pending issuance could also mean that the policy issuers are still working on risks. Yes, issuing an insurance policy is not like buying any regular stuff. The companies need to verify your information and analyze risk factors to come to a decision. The cover could be in the form of a letter or cover-note that follows the standards.
How Does A Cover Note Work?
Insurance companies have been using cover notes to provide individuals with proof of insurance. It is issued prior to the completion of all the insurance paperwork. During this time period, the insurers continue with the process of evaluation of risks. The cover note serves as the insured’s proof until the insurer issues the final policy documents. You even receive a certificate of insurance after successful verification.
Read Also: A Comprehensive Guide to Functions of Insurance!
If we talk generally then the cover note provides coverage the same as the full insurance policy. The exception lies in the number of restrictions. The insurers will impose some restrictions for you to ensure lower risk till verification. It is good that at least they are providing you coverage.
The longevity of cover note depends on the speed of your insurance company’s management. If they perform all the tasks of risk analysis quickly then you will get note quickly. If the insurer faces some problems after issuing a cover note then obviously there will be a delay. You can confirm with your insurance company for the expiry date of the cover note. Just in case it takes longer than the set date to issue the final policy then you can request a new one. Some companies even automatically extend the cover note.
Insurance companies allow people to cancel their policy during the cover note period. After all, the formal policy is still awaited. It gives them a chance to request a refund as they haven’t filed a claim yet.
What Type Of Information Is On Cover-Note?
- Insured’s Name, Full Address, And Work Profile
- Provisional Premium And Sum-Insured
- The date and time of issuance of Cover
- Expiry Date Of Cover Note
- The Scope Of Your Policy Under Cover-Note
- Property That Comes Under Coverage
- Cancellation Terms And Conditions
- A statement clearly conveying that you are covered under the terms and conditions of the company.
- Authority’s signature
If you are purchasing a vehicle on loan then cover notes are extremely important for you. They will help you in binding the transaction. The institution that is lending you the vehicle won’t allow you to use it without insurance. The cover note is an interesting addition to the insurance procedure. It gives you benefits without formal clearance. It even gives time to companies to explore all areas of risk.
Also read: A Complete Guide on What Does Car Insurance Covers?
In most cases, the cover note is given right away. Some buyers even make a call to the insurance companies for buying the policy. The company sends the cover note through email or fax to the buyer. In case, issuing a cover note is not possible then a certificate of insurance is used.
How Will A Cover Note Help You?
The cover note will help you at the time of checking. While driving on the road, there might be regular checking going on. You can use a cover note as proof of your valid insurance policy. You can show it to your police officials. You can even use the cover note for claims for accidents or theft. It will save you from paying
What If It Is Lost?
If your insurance cover note is lost, you have to follow these simple steps:
First, write a declaration stating you have lost the cover or it is damaged. You must send it to the insurer. Also, mention the details regarding the incident. It is important to share the details so that they understand your problem.
In case, some sort of damage occurs to your cover note then send it to them in the same condition.
For a new insurance cover note, you have to pay a certain amount so do pay the amount. Once the insurer receives your declaration, he or she will examine your declaration. If they find your efforts satisfactory then they will issue a duplicate cover note. Also, if you find your old cover note by any chance then return it to the company. You cannot keep two cover notes.
Final Words
Cover notes are an absolute necessity for people who want immediate benefits. After all, you have shared all the necessary details with the company. Also, problems do not wait for the final insurance policy. It might occur that you receive the cover note and the next day there is an unusual event. So cover note will come as an immediate rescue. Another instance could be that you find a policy with the same benefits at a low price. You have the cover note so you can even cancel your policy and request for refund. After receiving a refund, you can apply for insurance in another company. In this, way, it benefits you.
We hope the article clears your queries or doubts on the insurance cover note. The article shares a lot of information on cover notes including incidents that may occur. So it is easy to understand all aspects of the insurance cover note for you. If you want to learn more about the insurance types then there are multiple articles on it. Also, the comment section below is mainly for receiving your feedbacks and queries. So you can leave your comments. We will try and resolve your cover note queries in the shortest possible time.
