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GAP Cover
Additional Information
Provides cover for exposure shortfalls following a Motor Total Loss caused by an accident, fire or theft.
There are a number of variants to this type of cover, but broadly it provides shortfall protection following a total vehicle loss to an auto vehicle, covering the difference between the cost of replacement vehicle (Vehicle Replacement) versus the original vehicle or the remaining amount outstanding under a finance contract (Finance Shortfall Gap) after an insurance pay-out:
Finance Shortfall Gap - The shortfall is measured as the difference between the Customer's outstanding finance and the primary motor insurer's settlement at the date of total loss. Factors impacting on the customer's outstanding finance are the term of loan, the interest rate, down payments made and any negative equity that has been carried into the loan.
Vehicle Replacement - If the model of the vehicle is no longer available at the date of total loss a suitable replacement vehicle will be used. Unlike Financial Shortfall the gap becomes larger over time with Vehicle Replacement.
Pay-outs from the customer's primary motor insurer following a vehicle total loss will be determined by the age, make and model, and perceived condition of the vehicle immediately prior to the total loss.
Variations in Cover
It may be possible to change coverage from insurance to a waiver or waiver contract, particularly where the customer receives a credit at the time of total loss and must return to the originating dealer to activate it.
Other variations in cover relate to:
- Deductible Reimbursement which covers the insurance deductible;
- Rental Car Hire Exclusion;
- OEM Guaranteed Parts Indemnity which covers the shortfall in difference between using OEM and non OEM parts either at a total or partial loss claim event.
