Loan Equity Insurance (Gap Cover)

Loan Equity Insurance (Gap Cover)

What Is Loan Equity Insurance?

Loan Equity Insurance is a product that will help payout your finance contract in the event your financed vehicle becomes a total loss through accident or theft.

When your car becomes a total loss, your financier is required to have the outstanding loan amount paid in full, and if your motor vehicle insurance payout does not cover your total loan payout, Loan Equity Insurance can cover that shortfall for you.

What Does It Cover?

Loan Equity Insurance will cover the shortfall between your car finance contract’s payout amount and the motor vehicle insurance payout amount in the event of a total loss.

You may also elect to take out a “special benefits” add-on to your Loan Equity Insurance cover, which may assist with other out of pocket expenses if a total loss occurs.

What Are The Benefits?

The benefits of this policy is that when you are unfortunate enough to be in the position when your vehicle becomes a total loss, not only do you have to consider how you will get into a new car, you also need to make sure that your car loan obligations are met in full, as per your contract.

Loan Equity Insurance takes the pain away from worrying about any additional costs that you may incur, due to something that may be no fault of your own and can ensure that your car loan obligation is met, and you can get yourself into a new car in a timely fashion.

The most beneficial factors about Loan Equity Insurance Cover is that you can protect your credit worthiness by having any lump sum shortfall covered by this product and that in a total loss event, the possibility to escape the burden, cost free to you.

Summary

This product can protect your credit worthiness, as imagine you are now without a car and have a large shortfall which your lender will request payment in full, as their security being the vehicle is now a total loss. If you cannot pay this amount in full, you may be in default of your loan contract, which may prevent you from getting a new car loan.

For a small cost added to your loan can give you piece of mind knowing that in the event of a total loss, you can get into a new car with a new car loan contract quickly, and keep your credit worthiness intact.