Short Fall Insurance

Also known as Shortfall Insurance, this is another popular and relatively cheap form of valuable cover.


Your car or boat has been written off, either stolen or damaged beyond repair. Your comprehensive insurer pays the market or agreed value, but another $3,300 “gap” is needed to pay out your loan.


GAP insurance could save you from a huge financial burden. Cover is provided for ‘the gap’ up to $10,000. And the option of extra cover for any additional costs due to the inconvenience of the total loss, such as registration & insurance costs for the replacement vehicle.

Why does the ‘gap’ occur?

Several factors are involved:

  • borrowing to pay for various costs associated with buying a car such as registration, stamp duty
  • comprehensive insurance premium
  • consumer credit insurance premium
  • no deposit or trade-in at purchase
  • depreciation of the value falling faster than the loan

The market value of the vehicle is assessed by the insurers holding your Comprehensive Insurance at the time of the claim. If the amount they agree to pay is less than the balance outstanding on the loan then that difference is the gap.

How long is there a ‘gap’?

Generally, your maximum exposure to ‘the gap’ will occur from the day you take delivery to perhaps the end of the second or third year of the loan and depends upon the term of your loan.

Do I have to pay a premium every year?

No, you pay one premium, once only and you are covered for the duration of your loan.


Contact Kiwi Car Loans today on 0800 008888 to talk with one of our specialists for a Car Insurance Quote now, without obligation.