An insurance company may need certain period to issue your certificate of insurance even though you have bought a policy. So, what document can you use to prove that you are covered by a policy? The answer is cover note. It is a temporary document, which is issued by an insurer to prove that a client is insured until a final insurance policy is issued. In other words, it is different from policy document or certificate of insurance.
Importance and Details on Cover Note
Some companies may directly issue a certificate of insurance as a client buys a policy. However, some companies need more time to evaluate the risks associated with a client. During the evaluation period, cover note replaces the function of certificate. Therefore, the note commonly includes insurer name, the insured names, and coverage level.
The question is “Is there any possibility of changes from the cover note to the final certificate?” The answer is YES. There may be some changes in the final determination after the risk evaluation. However, during the evaluation period, the note provides the same coverage level as listed in the policy.
How Long Is The Cover Note Effective?
The effective period of a cover note depends on the time it takes for the insurance company to process the certificate. Whether the insurance company is faced with problems between the time of policy selling and the time of certificate issuance matters. Therefore, the following possibilities may happen:
- The cover note is extended in case that the insurance coverage ends before the actual certificate is issued.
- The policyholder may cancel the purchase in case that the company needs too much time to process the actual certificate. If no claim has been made until the cancellation, the policy holder may receive a refund.
The insurance companies may issue this document depending upon the type of policy purchased. Therefore, before buying an insurance policy, it may be important to check whether the company automatically issues a certificate or a cover note.