Gap Insurance or Shortfall Insurance

Gap Insurance is also know as Shortfall Insurance.  This type of insurance provides peace of mind by protecting you and your asset from certain losses in the future.

What is Gap Insurance?

If your car, boat, caravan, truck or plant and equipment is stolen or written off, often there will be a 'shortfall' or 'gap'.  This shortfall occurs because vehicles depreciate over the life of a loan.  The shortfall will be the difference between the amount you must pay the finance company (the loan pay-out amount) and the amount that will be paid to you by your comprehensive insurer (what the vehicle is now worth).  This shortfall can be in the thousands of dollars and is the amount you must now pay to your lender. You could end up with no asset as (its been written off or stolen) AND an unpaid finance contract.

Include your premium in your loan amount

Gap Insurance policies are a one-off premium that are due at the beginning of your loan term. The premium amount can be included in your finance amount and paid off over the life of your vehicle loan. Including your premium in your loan is a very economical way to ensure peace of mind.

How can I minimise the 'Gap'?

An easy way to minimise this 'gap' is to comprehensively insure your vehicle for a fixed value. When insuring your car you have a choice to comprehensively insure it at either market value or for an agreed fixed value.

Gap Insurance provides three things for you...

1. Pays out the shortfall to the finance company- up to certain limits, several gap policies are available to ensure you are adequately covered, but not over insured.
2. Can provide you with some funds towards a replacement vehicle/asset.
3. Some transfer costs are paid for you.


  • Helps you recover from a shortfall by providing payment to your insurer.
  • Helps you recover from a shortfall by contributing funds towards your replacement vehicle purchase*.
  • Keeps your credit rating intact.
  • Keeps you mobile in a new vehicle.
  • The premium can be included in your regular loan repayments.
Gap Insurance or Shortfall Insurance | AAA Finance and Insurance

Apply for Insurance

Call one of our Experience AAA Insurance Experts to discuss your insurance needs on (07) 5493 1222.  Alternatively enquire online and one of our insurance experts will be in touch.

*Conditions apply

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