What car insurance is required to lease a car? [2024]

When you lease a car is insurance included? When you’re entering into a lease contract, you’ll notice that some leasing companies will actually pay for certain costs associated with owning a vehicle, such as routine maintenance like oil and fluid changes in order to retain as much of the vehicle’s value as possible.

Unfortunately, leased car insurance is not one of them.

While every contract varies from company to company, virtually all contracts state that it’s your responsibility to pay for car insurance. Do you need insurance if you lease a car? Not only must you buy insurance, but you’re also responsible for buying the appropriate amount and type of coverage.

If you have a leased vehicle, you’ll definitely want to know the answer to “What car insurance is required to lease a car?” This guide will go over what types of coverage you are legally or contractually required to have in place. Once you understand the minimum lease insurance requirements, you’ll be ready to find an auto insurance policy that will help cover your leased vehicle.

The best way to get affordable leased car insurance quotes at the best prices is to shop around. Start comparing car insurance rates now by using our free tool. Just enter your ZIP to start getting car insurance quotes for your leased vehicle.

Leasing Your Vehicle

In today’s new car market, 25 percent of auto sales can be attributed to leases. Leases have become more generous and cheaper over the last several years.

Their terms have also become shorter, making them more attractive to car buyers. However, leasing a vehicle does not change the fact that you need auto insurance coverage.

When you lease a vehicle, be prepared to face higher requirements of insurance coverage then if you were to own your own vehicle.

For instance, many leasing companies will set a minimum deductible of $1,000 while some will require the deductible to be as low as $500. It is important to remember that additional insurance coverage protects your leasing company.

There are some situations in which the leasing company can be held accountable for damages if the person driving the vehicle did not have adequate insurance coverage.

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Car Insurance and Leased Cars

Here are a few truths when it comes to leasing a car:

• When you lease a car, you are legally responsible for it
• You will be required to carry an adequate amount of personal car insurance on your leased car
• You will be considered a co-owner of the car to the Department of Motor Vehicles

Leasing a car can be very confusing if you are used to buying, and you will need to make sure you have adequate car insurance coverage. You will sign a contractual agreement that says that you take responsibility for the car while it is in your possession, but at the end of the day, the leasing company owns the vehicle and you are simply paying for a portion of its value to use it.

If you’re the type of consumer who prefers to have a new vehicle every few years, leasing may save you money and a hassle in the process.

When you’re leasing a car, you are under contract for 1 to 5 years. Because you’re not buying the car and you won’t be earning equity, your payments for a leased car will be significantly lower than the payments for a financed car. The payment will be the difference between the current value of the car and the expected value of the car at the time the contract ends.

You may also be expected to pay a small leasing agent fee. When you lease a car does it include insurance? Unfortunately, you will have to purchase car insurance separately since it’s not included in the lease.

Paying Insurance When Leasing a Car

The bank or dealership that is leasing you the vehicle will mandate that you purchase and provide continuous collision and comprehensive coverage. This is because your leased vehicle is still technically owned by the bank, dealership, or leasing company.

They want to protect their asset in the event that some type of accident or unforeseen event destroys, damages, or causes the car to be lost.

Additionally, you will need to carry coverage that is required by your state, such as liability insurance. Liability insurance protects you as the driver and also protects the leasing company from being responsible, should they be named as an at-fault party to an accident.

The appropriate amounts of insurance coverage will protect both you and your leasing company from financial ruin, should a catastrophe occur with the leased vehicle.

Some other required coverages are collision and comprehensive coverage, which we will detail below.

Shopping online and comparing prices of different companies and insurance policies can help you make the best decision regarding coverage on your leased or purchased vehicle.

Lease Car Insurance Requirements to Satisfy State Law

You might already know that a leased car is titled in the name of its owner. While the leaser is the one listed on the title, in most cases you as the lessee will be the registered owner when you apply for plates.

This happens when the leasing company has the lessee sign a Power of Attorney to register the vehicle in the U.S. Once the Power of Attorney form is signed and the vehicle is registered, the lessee and primary driver are responsible for meeting the lease car insurance requirements that are set by state officials.

It also says in the fine print of the lease contract that it’s the lessee’s responsibility to maintain liability coverage to protect their finances and also to protect the lessor.

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State-Mandated Car Insurance Requirements

Every state has its unique car insurance laws. Some require car insurance explicitly, and some will require insurance or another expensive alternative.

Almost all individuals who comply with insurance laws will do so by purchasing a personal car insurance plan from a carrier in their state. If you fail to purchase car insurance as the registered owner of a car, you could face some very damaging consequences and penalties for driving without insurance.

And driving a leased car without insurance is no different. The requirements for insurance will depend upon the state that you live in.

Find your state on this table of the minimum car insurance required by state:

Car Insurance Coverage Requirements by State

A majority of states will require at least some level of liability coverage that will pay for a minimal amount of third-party damages.

In most states, strictly third-party liability insurance is required. This type of coverage will pay for the bodily injury and the property damage that is caused by the insured person and other listed or permissive drivers.

The actual limits that are required cross-country are fairly low, but some states have pushed for higher limits than others.

Other states, especially those in no-fault states, will require additional coverage to pay for your medical expenses. Common coverage requirements include:

• Bodily injury liability
• Property damage liability
• Medical payments or personal injury protection
• Uninsured motorist protection

Whatever the state insurance requirements are, it’s your job to be sure that you comply with them. Failing to comply with these mandated laws could result in court dates in both civil and criminal court.

While state minimums satisfy the law and help you avoid a misdemeanor, they do not really provide you with the proper level of protection. They are designed to act as a bare minimum and not adequate cover. Lessors understand this and this is why you are required to carry much more than the state minimums when you are leasing.

Minimum Coverage and Leasing a Car

State officials set the rules that all residents in the state must comply with. You’ll be responsible for abiding by these rules and also fulfilling your obligations as a lessee when you’re leasing a car.

Under a lease contract, you’re required to buy higher limits of third-party liability coverage than what’s required by the state. Under most contracts, you can carry no less than:

• Bodily Injury: $150,000 per person and up to $300,000 per accident
• Property Damage: $50,000 per accident

These higher limits are to protect the leasing company and its investment. You can use a lease car insurance calculator to help you figure out the best rates for the coverage that fits your needs.

Commonly Required Leasing Coverage Amounts

When purchasing a car insurance policy for a leased vehicle, you should be certain you’re meeting the minimum requirements for both the state and your leasing contract.

Some contracts require as little as $20,000 per person and $40,000 per occurrence liability insurance, $5,000 property liability coverage, and comprehensive and collision coverage for the actual value of the leased vehicle with a maximum $1,000 deductible.

However, other leasing companies may require as much as $150,000 per person and $300,000 for each occurrence, as well as $50,000 for liability coverage.

No matter what your leasing company requires from you as far as insurance coverage, comparison shopping can help you get the best policy for your needs at competitive rates. If you are to get into an accident in your leased vehicle, regardless of who is at fault, the best way to protect yourself and your assets is to have appropriate insurance coverage.

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Liability Insurance on a Leased Car

It’s easy to question why you’d need higher limits of liability than the average person in the state when you’re driving a car that belongs to a leasing company and not yourself. This is actually the prime reason why you’re expected to purchase more coverage.

By requiring the driver to carry higher than normal limits, it provides the lessor with a larger buffer of protection in the event of a big accident that results in a large lawsuit.

Lease Insurance Liability Requirements

If you enter into a finance contract, the contract has no specific requirements concerning your liability coverage. A lessor, however, has more interest in the car as a registered co-owner.

This is why you are required to carry a higher level of liability coverage than the state would require.

Liability consists of bodily injury and property damage coverage. When these terms are written, they are written on a per-person and per-accident basis. The lessor will require that you have no less than $100,000 per person, $300,000 per occurrence in bodily injury. The property damage requirements are usually $50,000, but they could go up to $100,000 with some leasing agencies.

Standard Car Insurance Requirements for Leased Cars

You will be required to carry an adequate amount of personal car insurance on your leased car because it’s required that all vehicles must be insured in the state where it is registered.

State car insurance requirements are very strict and they aren’t avoidable. As long as the car is registered to be driven, it needs to have at least liability insurance, and it is the registered vehicle owner’s responsibility to buy the coverage. Just because you are not the titleholder does not mean that the car is not registered in your name.

When you lease a car, the car will be registered to both the leasing agency and the contract holder.

You will be considered a co-owner of the car to the Department of Motor Vehicles. This is because you are responsible for damages that happen while you are driving and for fees accrued from tickets. The leasing company is listed because they have an interest in the car.

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Lease Insurance Requirements As Written in Your Lease Contract

Does car leasing include insurance? No, and you need to be aware of what is required by your lease contract.

You should review your lease contract closely before signing it. Once you skim past the details on the payment, the charges, the amount due at signing, and the termination statement, you will need to review the insurance requirements closely. The requirements are extremely strict and are not negotiable.

According to the Insurance Information Institue (III), when leasing a vehicle, you are still required to purchase your own insurance coverage for it. You might be comfortable with the requirements surrounding liability coverage, but the requirements for purchasing physical damage coverage are very different.

In addition to your state’s legally required minimum insurance coverages, your lender or leasing company will most likely require you to have collision coverage and comprehensive coverage on your vehicle.

• Collision Coverage: The collision part of your policy will cover damages to your car from an accident with another car or object. This applies to hitting a building, hitting a light pole, or colliding with another car
• Comprehensive Coverage: Comprehensive coverage applies when there is a loss unrelated to a collision with a car or another object. For instance, if your car was destroyed in the fire, stolen, vandalized, or was in a collision with wildlife, comprehensive coverage would be applied

Collision and comprehensive policies help protect both you and your lender or leasing company in the event of an accident.

If the leased vehicle is damaged, the lessor could easily be out of thousands of dollars in residual values and leasing fees as well. This is why the company will pay very close attention to your coverage to ensure that your insurer will pay to repair the car or replace it when you enter into the contract.

Read more:

• Cheap Car Insurance for Leased Cars
• What vehicles are exempt from car insurance requirements?
• Why do leased vehicles have higher car insurance costs?

Lease Insurance Physical Damage Requirements

You must carry physical damage coverage that will protect the actual vehicle in the event of a loss. You will need both comprehensive and collision and the coverage will be force-placed if the company discovers you do not carry it.

One thing you need to know is that you cannot automatically take the highest deductible offered.

When it comes to VW lease insurance requirements, Honda lease insurance requirements, or any other seller, the company wants to be sure you can pay for your deductible so the highest option is $500.

How Much Physical Damage Coverage You Need

Does insurance cover leased cars with physical damage if you are at fault? All lessees must carry both collision and comprehensive car insurance coverage on the car under contract.

Do you need full coverage insurance on a leased car? Full coverage is a must since it includes liability, collision, and comprehensive coverages. Let’s look at the average monthly rate based on whether you have high or full coverage and low or liability-only coverage.

Car Insurance for Company Vehicles: Average Monthly Rates by Coverage Level & Provider

The average monthly rate for full coverage is $345, which is only about $30 a month more than low coverage. The deductible that you choose is also important.

Since lessors don’t want you to have a deductible that you can’t afford to pay, many have written into their contract that you can’t carry a deductible higher than $500. Some may be a little more lenient and allow you to carry a $1,000 deductible if you’re leasing a high-end luxury auto.

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What It Means When You Have to List a Loss Payee on Your Insurance

The only way that the lessor can verify you have coverage is by requiring you to list their company as a loss payee.

This means that the company will be notified when coverage changes or is canceled. It also means that the insured will have to get a claim signed off by the loss payee so that they’re aware the vehicle was involved in a loss and that the vehicle is being repaired.

Gap Insurance on a Leased Car

Most lease agreements will require the purchaser to put a small down payment on their lease. However, some require none at all. People who lease a vehicle should be aware that their leased vehicle will depreciate quickly.

This means there will be a large gap between the amount owed on the lease and the amount that the car is actually worth, which is what the insurance company will pay should the car become a total loss.

Gap insurance was created to help cover the discrepancy between these two values. Your insurance company will not look at how much you owe on your loan or your lease when a car is totaled, their job is to pay fair market value at the time of the accident.

With most leasing companies, gap insurance is mandatory. This is the final lease insurance obligation you may encounter.  However, if it’s not mandatory, you should also strongly consider purchasing gap insurance to protect you in this situation.

Why do you need GAP insurance for a leased car? It protects the lessor by paying for the depreciation and also protects you as the lessee by paying for the remainder of your lease payments.

With gap insurance coverage the insurer will pay the difference between the car’s cash value and what is old to the lien holder.

However, sometimes the cost of gap insurance is rolled into your lease payments.

This means that you don’t actually purchase your own gap policy for the leased vehicle.  In most cases, the dealer or bank that leases the vehicle out will purchase a master policy from a large insurance company. This policy covers the gap insurance for all of the vehicles that they lease out. The bank or dealership will then charge you for a gap waiver with your lease agreement.

So, in this case, the answer to the question “Do you get insurance when you lease a car?” is that sometimes gap insurance is purchased for you.

If you will be leasing a vehicle, you should check with your leasing company or on the contract to find out if you are responsible for obtaining gap insurance or if it is rolled into your lease payments.

Check to see if it’s cheaper to add Guaranteed Asset Protection through your personal car insurer or through the company.

Read more: GAP Insurance Pricing and Coverage

Be sure to compare the cost of insurance from different providers. For more information, read our article, How do I find out if GAP insurance is included in my car lease?

Documents Needed to Lease a Car

To lease a car, you need the following documents:

• Driver’s license
• Insurance card (See our article, What does a car insurance certificate look like?)
• Proof of residency
• Personal references
• Pay stubs
• Title and registration of your current car
• Bank information and account number (applicable if you have a payoff)

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Leasing Versus Buying A Car

When you lease a car does it come with insurance? Are you required to have car insurance?

• You are required to carry car insurance on a leased vehicle
• The types and amounts of insurance will depend on the requirements of your state and your leasing contract
• In general, you will need liability, comprehensive, and collision coverage to meet the requirements of both
• Gap insurance is usually also required though many times it is rolled into your lease payments

While buying and leasing are both ways to have access to a vehicle, there are many differences between them.

For people who aren’t familiar with either process, the ins and outs of buying and leasing can be confusing, especially insurance requirements. Does a car lease cover insurance? If you’re considering leasing a vehicle, you might be wondering if insurance is included in your lease. The truth is that insurance is not included, and you have to have it in place to lease the vehicle.

The Difference in Leasing and Buying a Vehicle

There are many differences between buying and leasing a vehicle. People in the market for a new vehicle will need to do their research and evaluate their tastes and lifestyles to find out which option is best for them. The benefits of leasing a car include:

• Smaller down payment requirement
• Smaller monthly lease payments
• Driving a better car for less money
• Decreased repair costs compared to buying, as a factory warranty usually covers most repairs during a 3-year lease period
• The ability to drive a brand-new car every two or three years
• No need to hassle with trading in your old car to get a new one
• You only pay the sales tax on the amount of the car that you finance

The drawbacks of leasing a car include:

• When the lease has expired, you do not own the vehicle
• You are required to stay within a set mileage limit or pay overage fees
• Lease contracts can be overwhelming and confusing
• In the long run, leasing a vehicle can be more expensive than buying
• You may have to pay for wear and tear on the vehicle which will be due upon the termination of your lease
• If you need to terminate your lease early, it can be costly

Does leasing include insurance? No, that is an added cost and not included in your lease price. When it comes to insurance for leased cars vs. bought cars, the specific coverage required may vary but some form of car insurance is required either way.

Car Insurance: Leasing Vs. Buying

Car insurance is not much different whether you’re leasing or buying a car. The main difference is how much coverage you have to carry.

• The two most popular options when it comes to vehicles are leasing and buying
• Loan payments are often higher with buying a car than with leasing one
• Excessive wear and tear and mileage are not as much of a concern when buying a car

When you want to get a car, there are two financing options to explore:

• you can choose to lease the vehicle
• you can purchase the vehicle

There are some major differences between these two options, so you will need to take a close look at the pros and cons of each financing method.

Many new car dealerships provide the opportunity to lease a car. Essentially, it is like renting the car as you will not own it at the end of the lease term. Dealerships provide options to lease for 12 months to 48 months and past. Often, it allows you to get more vehicle for less money, which is why many people choose to lease.

Buying a car is another option. You might choose to buy new or used. In terms of financing, you can choose how much your payments will be based on how many months you will spread the payments over as well as how much you’re willing to put down in cash.

Read more: How much car insurance coverage do I need for a new car?

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The Pros of Leasing a Car

There are a lot of pros to leasing a car, which enables you to get the car you want without actually owning it.

You Get More Car for Less

People often lease because of being able to get more car for less money. You’re only paying for the depreciation of the vehicle as opposed to the entire value. Even once you add in the cost of taxes, registration, and other fees, it is often less than the cost of financing a new car. With a lower payment, you have the option to get more features in the car.

You could explore a higher trim level on the make and model you are interested in without spending any more on the monthly payments.

You might also get more safety features, which help to keep you safe on the roads.

The Future Value Has No Impact on You

The future value of the car has absolutely no impact on you. Many people say that a car depreciates the moment you drive it off the lot. If it does, it doesn’t matter to you. You’re only making payments on the car for the set terms of the lease. Once your lease is over, you bring the car back to the dealership and owe nothing.

The Upfront Cost is Minimal

The upfront cost for you to drive the car off the dealership lot is minimal. You might make the first month’s payment and possibly a small down payment. The money that you pay to the dealership upfront is more of a “good faith” payment than anything else. With financing a car, you could be looking at putting several thousand dollars down, and this might not be money that you have available.

The Cons of Leasing a Car

The cons of leasing a car should be thoroughly understood before you jump into a leasing agreement at a dealership.

Going Over in Mileage Is Expensive

When you get a lease, you set the mileage upfront. Many leasing agreements will provide you with 10,000 miles a year. You might be able to get 12,000 or 15,000 miles, though it’s unlikely that you will find mileage caps that are higher than this. The leasing agreement will identify what it will cost for every mile you go over once your lease is up.

If you have a three-year lease term with a 12,000-per-year mileage cap, you’re allowed to have 36,000 miles on the odometer when you turn the lease in. If you have 40,000 miles, you would be paying a certain amount for each of the 4,000 miles you went over.

Depending on the rate you’re charged, this can be a significant amount of money. Some dealerships will look the other way if you’re buying another car from them. However, many dealerships will require you to pay.

Excess Wear and Tear Is Your Responsibility

Your leasing agreement identifies what is considered normal wear and tear. Anything that is identified as “excessive” is your responsibility. You might have to pay for dings and scratches on the car’s body. You might also have to pay if there is excessive wear and tear on any of the following:

• Tires
• Brakes
• Any of the mechanical features

This could get expensive if you use the car a lot or don’t take good care of it.

Read more:

• Is it worth claiming a scratch on your car insurance?
• Does car insurance cover car doors dinging another car?
• Does car insurance cover non-accident repairs?

The End of Your Lease Requires You to Start Over

At the end of the lease, you have no equity. You have essentially been making payments to rent the vehicle. You will have the choice to buy the car or turn it in and choose another vehicle at the dealership. If you no longer have a need for a car, you can also choose to walk away entirely, though you won’t receive any money for turning in the lease like you would if you were to sell your car once it’s paid for.

The Pros of Buying a Car

You will find that there are pros of buying a car, starting with the fact that you will own your car outright once you have made all of the payments.

Mileage and Wear and Tear Aren’t a Problem

When you finance a car, you are working towards owning it. Once the finance terms are up, the car is yours. The mileage and wear and tear aren’t going to count against you. If you want to put 40,000 miles on the car in the first year, that’s your prerogative. The same goes for wear and tear, though it could ultimately impact the trade-in or resale value.

You Gain Equity

As you make payments, you gain equity in your car. The more payments you make, the more it will become yours.

Eventually, you will owe less and less on the car until you own it outright. Having equity is not something you will ever have in a lease.

Once the car is paid for, there is value in it. You can then choose to not make payments while having a car to drive or sell the car in order to make a profit.

You Can Choose to Customize Your Car

When you own your car, you can make all of the modifications that you desire. Whether it’s a sound system, window tint, a custom paint job, or something else, it’s your car.You can customize your car however you want without having to worry about giving it back to the dealership in a sellable condition.

Read More: Does car insurance cover paint jobs?

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The Cons of Buying a Car

Plenty of cons to buying a car exist, too. Familiarize yourself with them so you can determine if it’s still in your best interest to buy versus lease.

Upfront Costs Are Higher

The upfront costs are often higher when you buy a car. Many finance companies require you to put 10 to 20 percent of the car’s value down as a down payment. The monthly payments are also going to be higher because you’re purchasing the entire vehicle instead of simply leasing it for a short period of time.

There is often a balance between what you can afford for a down payment and what you can afford as a monthly payment. The more you put down, the more affordable your monthly payment will be.

Insurance Is Higher

In addition to what the state requires for car insurance, you also have to look at what the lien holder requires. If you choose to finance your car when you buy it, you have to meet the requirements of the lienholder until the loan is paid off, and the title is transferred to your name.

The lienholder might require you to have collision and comprehensive coverage, which is common. (For more information, read our “How does a lienholder affect car insurance rates?“).

These requirements also add more financial protection to your policy. If you get into an accident that is your fault, you will have the coverage to make the repairs to your car. Plus, you have coverage for non-collision-related accidents, such as a rock hitting your windshield or hitting a deer on the road.

Increasing coverage will increase your premiums.

However, you can often control how much it increases by determining the coverage levels and by getting quotes from several car insurance companies. Once you get the policy, you then need to send proof of insurance to the lienholder so they know that you have satisfied the insurance requirements.

There Might be Negative Equity

If there is a difference between what you owe and what your car is worth, it’s called negative equity. It’s common to have a lot of negative equity in your car loan if you rolled over the remnants of an old loan when you purchased your new car.

If you don’t pay off your car in full before trading it in to get a new one, you will have to roll over the balance. If you don’t think you’re going to keep your car until the car is paid off, it might be a good idea to explore a lease instead. There are plenty of ways to overcome negative equity, though it might take longer than desired.

• Pay the loan off in its entirety.
• Keep loan terms as short as possible while still being able to afford the monthly payments.

The financing option for everyone is different based on what they can afford and what they’re looking for. When you decide you want to get a car, you need to weigh the pros and cons of leasing and financing. It will make it easier for you to make a decision that works for you and your budget.

As you can see, when you lease a car it’s common for your insurance to cost more than it would if you were financing. With this being said, there are ways to keep your leased car insurance rates low.

Should you shop around for car insurance? Yes, the most effective way to save is to shop around for car insurance with an online comparison tool. Before you buy leased car insurance, enter your ZIP in our free tool below to compare car insurance quotes to cover your leased vehicle now.

Other Types of Car Insurance Coverage

Other types of auto insurance that may be legally required in your state or that you should consider, include the following:

• Bodily injury liability: This type of coverage comes into play in the event that you cause harm to someone else. Purchasing more than the state required a minimum amount of bodily injury liability coverage can help protect your home, savings, and other assets. It’s important to know that your leasing company may require you to have more bodily injury liability coverage than what is legally required in your state
• Medical payments or personal injury protection: This portion of your auto policy covers medical treatment for injuries sustained to you or other passengers in your vehicle. Depending on the state, personal injury protection can cover medical payments, lost wages, and the cost of replacing services normally performed by someone who was injured in the accident. In some situations and states, it can also cover funeral costs
• Property damage liability: This type of coverage applies when you damage someone else’s property. It not only applies to other vehicles but can also include damage to lamp posts, fences, and other structures you may hit. Again, check with your leasing company or on your contract to find out if you are required to purchase more property damage liability than your state’s requirements

No matter who you are, what kind of car you drive, or if you lease, own, or have a loan out on your vehicle, having the minimum legal requirements and amounts of insurance to protect you is very important.

The Bottom Line: What car insurance is required to lease a car?

Leasing companies generally require full coverage insurance to lease a car. The average rate for full coverage car insurance is $80 a month in the U.S.

While our experts have provided enough information so you have no need to do online searches for “leasing a car insurance” or “lease/leasing car insurance,” what you can do if you’re leasing a vehicle it to be sure you have enough insurance to meet your state’s minimums and satisfy your leasing agreement.

You can do this by checking with your auto insurance company and your leasing company or lender. To potentially find better deals on auto insurance, consider using an online auto insurance comparison tool.

Compare car insurance rates now by using our free tool below!

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Case Studies: Utilizing Different Types of Insurance for Leased Cars

Case Study 1: Liability Coverage

Sarah recently leased a new car and wants to ensure she meets the insurance requirements set by her leasing company. She understands the importance of liability coverage to protect herself and the lessor in the event of an accident.

Sarah decides to purchase a liability insurance policy with coverage limits of $100,000 per person and $300,000 per occurrence for bodily injury, as well as $50,000 for property damage. This ensures that she has adequate coverage to fulfill the leasing contract’s requirements and provides financial protection in case she is found at fault in an accident.

Case Study 2: Comprehensive and Collision Coverage

John is leasing a luxury vehicle and wants to protect it from potential damage. He knows that comprehensive and collision coverage is essential to cover different types of losses. John decides to purchase both coverages to safeguard his leased car fully.

Comprehensive coverage will protect him from damages caused by non-collision events such as theft, vandalism, or natural disasters. Collision coverage, on the other hand, will cover damages sustained in accidents involving other vehicles or objects. By having comprehensive collision coverage, John can have peace of mind knowing that his leased car is protected from various risks.

Case Study 3: Gap Insurance

Mark has leased a brand-new car and is concerned about the potential gap between the car’s value and the amount he owes on the lease in case of a total loss. To address this concern, Mark decides to purchase gap insurance.

One day, unfortunately, Mark’s car is involved in a severe accident that results in a total loss. While his regular insurance policy pays the actual cash value of the car, it falls short of covering the remaining balance on the lease. However, thanks to the gap insurance he purchased, Mark’s outstanding lease balance is paid off, relieving him of any financial obligations towards the lease contract.

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