What is GAP Insurance
Guaranteed Asset Protection insurance or GAP INSURANCE as it is more commonly known. Protecting the purchaser from financial loss if your vehicle is written off. GAP insurance helps protect you from financial loss, if the insured value of your car is less than the financed amount (amount owed). Most clients are not aware they are at risk of a short fall in some circumstances.
How does this occur?
Firstly, unfortunately the vehicle must be written of – a total loss must occur. Your bank or financier will ask’s you to pay the remainder of the loan or finance out. If the amount you owe is less than the amount the vehicle is insured for then you do not have a problem. When the amount you owe is more than the insurance company is prepared to pay (insured amount) this is when you would make a GAP cover claim! Unfortunately, insurance companies do not always pay the amount your car is insured for, policies can be written out as fair market value, this can cause a problem, so check the fine print with your insurer.
GAP Insurance - How do shortfalls occur!
At CanDo loans and GAP insurance (Guaranteed Asset Protection insurance) we have found several reasons shortfalls occurred. Sometimes the car’s market value decreases faster than the loan is repaid. This is especially the case with car loans over 7 years or perhaps the trade in the client used had money owing on it and the bank refinanced this debt also. This would make any loan top heavy from day one and expose you to a shortfall if the vehicle was written off.
How do I apply – what level of cover is available?
Because the vehicles value, financed amount and insured amount affect the cover required to make sure you do not experience a loss because of an accident (total loss) its best to talk to a CanDo licenced insurance manager today. We have the experience to inform you of all your options.
GAP cover is it worth it?
GAP cover is it worth it or are there options other than GAP cover? Yes, indeed there are, to find out more about these and other finance options please feel free to call a CanDo finance and insurance manager today.