Security Shortfall Insurance (Gap Insurance)

Security Shortfall Insurance protects you as a borrower by paying the shortfall amount owing to your credit provider or bank if, in the event that you have a total loss due to accident, theft or damage, and the amount received from your comprehensive insurer is inadequate to finalise the loan on your vehicle.

Such a gap exists because, in most cases, you initially borrow more than the vehicle's market value (Registration cost, stamp duty, dealer delivery charges, comprehensive insurance etc) and the outstanding principal on your loan falls relatively slower than the value of your vehicle in the initial period of the loans term. Sometimes the quantum of this gap can run into many thousands so it's important you consider this product to ensure you are adequately protected. For most vehicles purchased, the maximum exposure to this gap will occur from the date of purchase to around the 2nd or 3rd year through a standard loan of 60 months as illustrated in the graph below.*

When you borrow money to purchase a vehicle you may be exposed to an equity gap. This gap is the difference between the insured value of your vehicle and the outstanding principal on your loan.

You can only purchase Gap Insurance when you enter into a new finance contract at the time of a vehicle purchase and the vehicle must be comprehensively insured.

Benefits of Security Shortfall Insurance (Gap Insurance)

  • Protects your finances and credit rating in the event your vehicle is declared a total loss due to theft or accident.
  • Gap Insurance can be easily financed into most loans.
  • You can purchase Gap Insurance independently of your current comprehensive insurer.
  • Most GAP insurance policies also compensate you with an additional cash benefit

* Gap Insurance Graph is provided for illustrated purposes only. For further details, please read the insurers Product Disclosure Statement.