The Gap policy covers some of the difference (the gap) between a total loss payout on your vehicle by your comprehensive insurer and the balance owing under your credit contract. This is called a loan equity shortfall.
|Option||Max Benefit||*Additional Benefits|
You have an accident in your vehicle and the comprehensive insurer deems the vehicle to be a total loss. The insurer pays out to the financier, leaving a $5000 outstanding balance on your credit contract that you are liable for and which must be paid immediately. If you had GAP Cover, it would provide a payment of the outstanding amount less the comprehensive insurance premium and the original GAP Cover premium saving you potentially thousands*.
Purchasing a replacement vehicle can also be an expensive exercise which is where the additional benefits under options 1, 2 and 3 really help out.
*Example only. There may be other deductions depending on the status of your credit contract.
This is only a summary of cover; please see policy booklet for full terms, conditions and benefits.