CREDIT SHORTFALL
Want to Know a little about Credit Shortfall? Let us tell you.
Credit Shortfall Insurance covers the difference between the outstanding balance on a financed vehicle and the insurance payout in case of theft or write-off. It ensures that the policyholder is not left with a financial shortfall after their vehicle is declared a total loss.
Credit Shortfall Insurance Solutions
When it comes to protecting your car, having credit shortfall is crucial. The challenge you face is while your car is financed, it gets stolen or written off and your car insurance won’t cover the full outstanding financed balance. This is where credit shortfall can assist to alleviate that burden of the shortfall.
Some of the covers available
Credit Shortfall Cover
Personal Accident
Excess Protector (optional)
Installment Protector (optional)
Some of the exclusions, what it will not cover
Loan is in Arrears
No cover as there has to be an active comprehensive insurance policy
Limited cover for balloon financed vehicles - subject to approval
All accessories or extras must be specified in your current comprehensive insurance
Your comprehensive insurance is rejected for any reason
Your vehicle is not written off for any reason or stolen and then recovered but repairable
Your vehicle has to be financed
Refer to Terms & Conditions for a full list of exclusions
Get in touch with us today to learn more about the insurance solutions and discover how you can help protect your car.
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Credit Shortfall
This benefit covers the gap between your comprehensive insurance payout and the remaining amount you owe the bank if your vehicle is written off or stolen and not recovered.
Excess Protector Benefit (Optional)
If your vehicle is written off and your insurance claim is approved, the Excess Protector benefit will reimburse you up to the selected amount for the excess you paid on your comprehensive vehicle insurance claim.
Personal Accident
We offer personal accident cover for the vehicle’s registered owner, providing benefits for accidental death, total permanent disability, and accidental exposure to HIV. This coverage applies even if the vehicle is not written off and continues if you no longer owe money on your vehicle loan.
Installment Protector (Optional)
If your vehicle is written off and your insurance claim is being reviewed, our Installment Protector benefit will cover up to 2 months of your vehicle payments until the claim is finalised.
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Credit Shortfall
Credit Shortfall Insurance
What is credit shortfall insurance?
Who needs credit shortfall insurance?
It’s ideal for anyone financing a vehicle, as it protects you from owing more on your car loan than the car’s insured value in case of a total loss.
How does credit shortfall insurance work?
If your car is written off or stolen, your comprehensive insurer pays the market value. If this is less than your outstanding loan, credit shortfall insurance covers the difference.
What is typically covered by credit shortfall insurance?
It covers the shortfall between your car’s insured value and the remaining balance on your finance agreement, excluding any arrears or added interest.
What is not covered by credit shortfall insurance that clients often assume is covered?
Arrears, additional interest, extended warranties, and insurance premiums added to your loan are typically not covered by credit shortfall insurance.
Are there limits to the payout provided by credit shortfall insurance?
Yes, most policies have a maximum payout limit, which may be a percentage of the car’s value or a fixed amount. Check your policy for specifics.
Can credit shortfall insurance be transferred to a new car or loan?
Policies are generally specific to the car and loan they were taken out for, but some insurers may allow transfers under certain conditions. Always verify with your insurer.
What complex factors can affect credit shortfall insurance claims?
Policy exclusions can include if the car is written off due to illegal activities or if there are undisclosed modifications. Additionally, the insurance may not cover the full shortfall if the car’s depreciation was faster than expected.
Does credit shortfall insurance cover the balloon payment at the end of a finance agreement?
Some policies do cover balloon payments, but this is not standard. Check your policy or opt for one that includes this coverage if you have a balloon payment.
How does the depreciation of the car affect credit shortfall insurance?
Rapid depreciation can increase the shortfall, making this insurance especially valuable for cars that depreciate quickly. However, excessive depreciation due to high mileage or poor condition may not be fully covered.
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