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Gap Insurance |
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Why is gap insurance considered as a financial safety belt? Simply put, it keeps you from being financially ruined when disaster hits your car.
GAP insurance provides protection for a capped difference that may occur between
the comprehensive insurance cover payout and the actual amount owed under a finance contract
to the financier in the event of the vehicle becoming a total write-off
due to Accident, theft or damage. It is a once only premium to protect the customer
for the life of the finance contract. |
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Who does Gap Insurance suit? |
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Gap Insurance is suitable for customers who finance a motor vehicle and want
peace of mind and protection from financial exposure that may occur should their
vehicle be stolen or written off. |
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Benefits of Gap Insurance |
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- Reduces or eliminates your financial exposure to a shortfall between the insurance
payout and the outstanding balance on the loan (up to $15,000*).
- Provides added protection for your credit rating in the event of the total loss.
- Includes an additional benefit that can provide a one off payment of up to $4,000*
for any other expenses incurred.
- The premium covers you for the full term of the loan to a maximum of five years.
- The cover is payable up front or with our monthly payments plan (**Please refer
to the terms and conditions).
Click here to refer
PDS |
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Understanding Gap Insurance |
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All of us are accustomed to the concept of insuring our valuable assets against
loss and damage: Home & contents insurance and comprehensive motor vehicle insurance are typical insurance products
However, not everyone is aware that there is the potential for a financial loss
if their car is written off while under finance and a shortfall occurs
between the insurance payout and amount still owing on the finance
- despite the fact that the car is covered by comprehensive motor vehicle insurance.
Gap Insurance is protection against this potential shortfall. It helps by paying the difference (the Gap)
between your finance payout and the insured value of your vehicle if it
is written off. |
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How does a shortfall occur? |
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If your vehicle is written off while it is under finance, your financier will require
you to pay out the balance outstanding and unpaid on the finance contract.
In a Total Loss situation, your insurance company will compensate you for the loss of your
vehicle by paying you the vehicle's current market value of the car (as determined by them),
or an agreed value (if you have an agreed value policy).
Unfortunately, the amount paid to you by the insurance company is often less than the amount required to pay out the finance. This is the shortfall amount.
This shortfall can occur for a number of reasons, but is often due to the fact that
a car's market value declines faster than the finance on the car is paid back in the initial years after the finance commenced for
the first few years of its life.
"POMI - You’re secure" |