Credit shortfall insurance


They are not insured by insurance and when they pay the retail value of your car they will not consider all additional things that are not insured, that was part of improvement on your car. So when looking to take credit shortfall insurance it is important for you to understand which are exclusions that the insurer will have or will make in terms of paying out your claim. 

Remember what you want to do with the shortfall insurance is for it to cover you so that you do have to end up paying that outstanding balance out of your pocket. It can become a huge nightmare for you if you do not know some of their exclusions. Now we've already talked about the balloon payment, so any residual amount that is on your financing will not be paid by the credit shortfall insurance. 

The second thing is any other non standard trimmings that you add to your car, for instance a radio that is not standard with the car, they will not pay for that. The third thing that you need to be cautious about is when you refinance your car, for instance, you finance your car or you consolidate. 

So the third thing that you need to be cautious of is when you take the option to refinance your car loan and you find that you got a high settlement because the loan has been refinanced. Which then means that the retail value, and the amount that you still owe the bank may have a huge difference, and that huge difference, unfortunately, is not going to be covered by credit shortfall insurance.

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