Cover notes: Under UK law a car insurance policy is of no effect for the purposes of section 147 of the Road Traffic Act 1972 until a certificate of motor insurance has been delivered to the insured. This means that you are not technically covered if you have bought car insurance on-line until you receive the documents in the post.
Under the provisions of section147 (1) of the Road Traffic Act it clearly states that whereby ‘a policy of insurance shall be of no effect for the purposes of this part of this Act unless and until there is delivered by the insurer to the person by whom the policy is effected a Certificate…’. Technically, an insured is not covered in accordance in accordance with the Road Traffic Act until he is in possession of a valid certificate (and ‘certificate’ will be deemed to include ‘cover note’ for these purposes) in the prescribed form, although there are a limited number of situations where delivery will be deemed to have taken place, even though the insured is not actually in possession of a certificate, e.g. where the certificate has been consigned to the post for delivery to the insured. In practice, and since the insured has up to 5 days to produce a valid certificate to the police when requested to do so, a cover note or certificate may have to be prepared by the insurers but not actually received by the insured and the latter may still avoid falling foul of the law.
With this in mind the law was changed in 2010 to allow the electronic delivery of insurance documents including cover notes and certificates of Insurance. By electronic delivery it is assumed that most documents will be sent to the email address you supply when applying for a quote.
With the full functioning of the Motor Insurance Database – the need for temporary certificates of cover or cover notes as they are popularly known, will decline.
The Insurance company from who you buy car insurance is obliged to electronically update the MID daily with details of all the drivers and cars that it has ‘put on cover’ that day. There is no need for the public to do anything in this respect, however a cover note still will be issued from an Insurance Brokers office to allow temporary driving before the certificate of insurance is delivered.
Bear in mind that you may well be stopped by the Police during this period as your details will not appear on the MID for one day.
The police will not accept a policy document as evidence of insurance and a cover note or certificate must be produced when requested or within five days thereafter.
A cover note is, in effect, a temporary policy of insurance (Road Traffic Act section158 (1)) and is usually issued pending the preparation of the permanent document but a cover note also fulfills the function of a temporary certificate of motor insurance. It will normally contain the following details::
- A statement to the effect that the insured is held covered in the terms of the insurers’ usual form of policy for the risk (the cover note will contain a space between the words ‘of’ and ‘policy’ into which the person issuing the cover note must insert ‘Comprehensive’, ‘Third Party, Fire and Theft’ or ‘Third Party Only’, as appropriate) subject to any special terms noted on the cover note.
- Terms of cancellation – usually 24 hours upon written notice being given.
- The date and time of commencement of cover.
- The duration of cover – usually 30 days and sometimes 60 days.
- The registration mark of the vehicle and its make.
- The name and address of the insured.
- Purposes of use of the vehicle.
- Any special terms – such as driving limited to the insured or an excess.
- A certified statement that it is issued in accordance with the provisions of the Acts, that is to say the latest Road Traffic Act and the comparable Road Traffic Acts of Northern Ireland, the Channel Islands and so on, as were discussed in the course. The statement is accompanied by a facsimile signature of the Head Underwriter or other senior-ranking official of the insurer issuing the cover note.
A cover note cannot be ante-dated. For example, if a man purchases a car one day and does not arrange insurance cover until the next day, for whatever reason, the cover note cannot be shown to be valid as from the time when the vehicle was actually acquired. The student will readily appreciate that ante-dating may lead to abuse – the car owner may have actually been driving uninsured for a day in contravention of the Road Traffic Acts and it would be wrong for insurers to help a person to avoid his obligations, however unwittingly. The situation would become even more complicated if the driver were to be involved in an accident before he arranged insurance cover. If more than one cover note is issued it is essential that the dates (and times) are continuous. If a gap occurs in cover it is not possible, for the reasons outlined above, subsequently to issue a permanent certificate dated from the day when the first cover note was issued, but only from the commencement date of the continuous insurance.