Car Insurance on Leased Vehicle: Everything You Need to Know

When you lease a car, you are not the owner of the vehicle. You are simply renting it for a specified period of time. This means that you are required to have car insurance on the leased vehicle, just like any other car. But, the type and amount of coverage you need may be different. In this article, we will explore everything you need to know about car insurance on a leased vehicle.

What is Car Insurance on a Leased Vehicle?

Car insurance on a leased vehicle is a type of insurance policy that covers damages or losses to the leased car. This policy is required by the leasing company and is usually more comprehensive than a standard car insurance policy. The reason for this is that the leasing company wants to protect their investment in the car.

When you lease a car, you are responsible for any damages that occur to the vehicle during the lease period. If you do not have the proper insurance coverage, you may be liable for any damages or losses that occur. This is why it is important to have the right type and amount of car insurance on your leased vehicle.

Types of Car Insurance for a Leased Vehicle

There are several types of car insurance policies that you can choose from when leasing a vehicle. The most common types of car insurance for a leased vehicle include:

• Liability insurance
• Collision insurance
• Comprehensive insurance

Liability insurance is the most basic type of car insurance and is required by law in most states. This type of insurance covers damages or injuries that you may cause to other people or their property while driving your leased vehicle. It does not cover damages to your own vehicle.

Collision insurance covers damages to your leased vehicle in the event of a collision with another vehicle or object. This type of insurance is usually required by the leasing company.

Comprehensive insurance covers damages to your leased vehicle that are not caused by a collision, such as theft, fire, or vandalism. This type of insurance is also usually required by the leasing company.

How Much Car Insurance Do You Need?

The amount of car insurance you need for your leased vehicle will depend on several factors, including the leasing company's requirements, your driving habits, and your budget. It is important to review your lease agreement and consult with your insurance provider to determine the appropriate amount of coverage.

Generally, leasing companies require a minimum amount of liability, collision, and comprehensive coverage. The amount of coverage required may vary depending on the value of the leased vehicle and the terms of the lease agreement.

How Much Does Car Insurance on a Leased Vehicle Cost?

The cost of car insurance on a leased vehicle will depend on several factors, including your driving record, the type and amount of coverage you choose, and the value of the leased vehicle. Generally, car insurance for a leased vehicle is more expensive than car insurance for a vehicle that you own outright.

However, there are ways to keep the cost of car insurance on a leased vehicle down. Consider increasing your deductible, which is the amount you pay out of pocket before your insurance coverage kicks in. You can also look for discounts, such as multi-car or safe driver discounts.

What Happens if You Don't Have Car Insurance on Your Leased Vehicle?

If you do not have the proper car insurance coverage on your leased vehicle, you may be in breach of your lease agreement. This can result in penalties or even the termination of your lease. Additionally, if you are involved in an accident and do not have insurance, you may be personally liable for any damages or injuries that occur.

The Bottom Line

Car insurance on a leased vehicle is a necessary expense that can protect you from financial liability in the event of an accident or other loss. It is important to review your lease agreement and consult with your insurance provider to determine the appropriate type and amount of coverage for your leased vehicle. With the right coverage, you can enjoy your leased vehicle with peace of mind.