What Insurance Do I Need?
There are a number of types of insurance you really ought to have in place to protect yourself when borrowing. A loan is a liability that requires some management, and a little time spent arranging some appropriate cover will help borrowers avoid negative consequences if they become unable to keep up their loan for reasons beyond their control. The team at our sister company Saffron Business Insurance work closely with BIZI Finance and are available to advise you on any of the available insurance policies on 09 930 6260, but briefly here is an overview of each:
1. Comprehensive Vehicle Insurance
The vehicle itself needs to be protected for fire, theft, accident damage, or even a total write off. It can be a dangerous world out there sometimes, and you need to make sure you don’t lose out when something bad happens. In nearly all cases, lenders require proof of cover for loan agreements to be completed, and will be noted as an interested party on the policy, meaning the lender is paid out first in the case of a total loss.
2. GAP Insurance
(Gap = Guaranteed Asset Protection, also known as Shortfall Insurance). When a vehicle is completely written off in a serious accident, the insurer pays out the market value or agreed value of the vehicle, however there may be a shortfall in the amount still owed to the Lender. GAP insurance provides cover for any ‘gap’ or shortfall there may be at the time of the accident.
3. Loan Protection Insurance
Also known as Credit Contract Indemnity or Lifestyle Protection Insurance, these are the common descriptions for loan protection for vehicle purchases and loans, but for larger general purpose business loans, it is also recommended that borrowers consider various types of life insurance policy. The purpose of each of these policies is to either pay out loans or cover the cost of the monthly repayments if the borrower becomes, sick, redundant, or otherwise incapacitated during the lifetime of the loan. Since peoples circumstances, both financial and otherwise vary significantly, it pays to get advice from a specialist on the right type of cover.
4. Business Insurance
Anyone taking on business borrowing of any sort should review their insurances to ensure their cover is adequate, correct, and current. There is a wide array of cover available for business risks, from material damage to assets, to loss of income, key person protection, and public liability. Business borrowers should speak to a suitably qualified business insurance specialist to ensure that they, their business, their clients, their family, and their staff are protected in case of the worst happening.
5. Extended Vehicle Warranty
Most new car warranties expire after the first few years of a new vehicle’s life. Extended warranties are designed to cover major mechanical failures of a vehicle. They do not cover wear and tear. Due to the uncertain nature of the cause of vehicle failures and faults, this is one type of product that Saffron does not offer.