What is Shortfall Insurance?
Shortfall insurance is a mechanism by which the rest of an outstanding loan will be paid off by your insurer, in the case that your vehicle is damaged beyond repair, or stolen and not recovered. This saves you from having to pay off the rest of a loan for an asset which is no longer usable.
Shortfall insurance can only be taken out at the start of the loan contract, so it is crucial that you include such cover when you sign up for your vehicle loan. That way you can rest assured that you won’t be liable to pay for a vehicle that you don’t own or can’t use, should it become such after you have taken out a loan upon it.
Depending on the level of cover selected, this policy may also pay a range of expenses associated with the replacement of your vehicle.
Consider the following:
Your car has been written, either due to being stolen or damaged beyond repair. Your insurer pays the agreed value of the car, which is $15,000, but your finance company requires $20,000 to finalise the loan. That means you need to give over another $5000 to pay out your contract, an amount which the average person will have on hand for unexpected emergencies such as this – and even if you did; why would you spend that money on a car which is no longer yours?
You’re stuck in a rut, how can you cover this $5000 gap? What can you do to get out of this situation?
You can use your shortfall insurance that Natloans organised for you, of course!
Cover can vary, with possibility to cover a ‘gap’ of up to $20,000. Shortfall insurance may also over additional associated costs of replacing your vehicle. Such cover may extend to include registration, stamp duty, insurance costs and more. The amount of extra cover you enjoy depends upon the level of cover you select in your policy. And all this for what could be as little as $3 a week!