Also known as Gap Insurance, Shortfall Cover, or Equity Protection Insurance.

This type of insurance pays the shortfall that can occur if a vehicle, subject to a finance agreement, is a “total loss” as a result of an accident or theft and the amount payable under the comprehensive motor insurance policy is less than the amount required to payout the finance agreement.

Gap Insurance could save you from a huge financial burden. There are different levels of cover and premiums vary accordingly, a one off payment and you are covered for the full term of your loan. Benefits are also payable for on road costs of replacement vehicle, insurance excess, registration and insurance costs for the replacement vehicle.

There are several factors involved why a Gap may occur, borrowing to pay for various costs associated with buying a car such as on roads, and the value falling faster than the loan balance, especially if it’s a brand new car. As soon as you drive that new car out of the car yard you have usually lost a few thousand dollars in car value instantly, therefore, Gap Insurance is a popular and relatively cheap form of valuable cover.

The information provided on this site is for general advice only and the product disclosure statement should be consulted for full details.