Lease Car Insurance Requirements

Leasing a car is a popular option for individuals who want a new car every few years or want to avoid the hassle of selling their vehicle. When leasing a car, however, it’s important to understand the insurance requirements. In this article, we’ll discuss the insurance requirements for leasing a car and answer frequently asked questions.

What Insurance is Required When Leasing a Car?

When leasing a car, you’re required to have certain types of car insurance. The lease agreement will typically require you to have liability insurance, which covers damages you cause to others in an accident. This insurance will typically have minimum limits, such as $50,000 per person and $100,000 per accident.

In addition to liability insurance, you’ll also be required to have collision insurance, which covers damages to the vehicle you’re leasing in the event of an accident. This insurance will usually have a deductible, which is the amount you’ll pay out of pocket before the insurance kicks in.

Lastly, you’ll be required to have comprehensive insurance, which covers damages to your leased car that are not the result of a collision, such as theft, weather damage or vandalism.

How Much Insurance Coverage is Required When Leasing a Car?

The amount of insurance coverage required when leasing a car varies depending on the lease agreement. However, most lease agreements will require you to have liability insurance with at least $50,000 per person and $100,000 per accident. You’ll also be required to have collision and comprehensive insurance with deductible amounts specified in the lease agreement.

It’s important to review your lease agreement carefully to understand the insurance coverage requirements. If you’re unsure about the insurance requirements or have questions, it’s best to consult with an insurance agent.

Can I Use My Existing Car Insurance When Leasing a Car?

You may be able to use your existing car insurance when leasing a car, but it’s important to review your policy to ensure it meets the insurance requirements of your lease agreement. If your policy doesn’t provide the required coverage, you’ll need to purchase additional insurance to comply with your lease agreement.

It’s important to contact your insurance provider before leasing a car to ensure you have the proper coverage in place. Your insurance provider can help you understand the coverage requirements and provide you with quotes for the additional coverage you need.

What Happens if I Don’t Have the Required Insurance When Leasing a Car?

If you don’t have the required insurance when leasing a car, you may be in breach of your lease agreement. This could result in penalties or fees, and your lessor may even terminate your lease agreement. You may also be held liable for damages in the event of an accident.

It’s important to ensure you have the required insurance coverage when leasing a car to avoid any potential issues. If you’re unsure about the insurance requirements, it’s best to consult with an insurance agent or review your lease agreement carefully.

FAQ

Q: Do I need to have full coverage insurance when leasing a car?

A: Yes, most lease agreements require you to have full coverage insurance, which includes liability, collision and comprehensive insurance.

Q: Do I need to purchase insurance through the dealer?

A: No, you’re not required to purchase insurance through the dealer. You can purchase insurance from any licensed insurance provider.

Q: Do I need gap insurance when leasing a car?

A: Gap insurance is not typically required when leasing a car, but it’s recommended. Gap insurance covers the difference between the lease payoff amount and the actual cash value of the car in the event of a total loss.

Conclusion

Leasing a car requires certain types of car insurance, including liability, collision and comprehensive insurance. It’s important to review your lease agreement carefully to understand the insurance coverage requirements and ensure you have the proper coverage in place. If you’re unsure about the insurance requirements or have questions, it’s best to consult with an insurance agent. By following the insurance requirements of your lease agreement, you can protect yourself from potential penalties, fees or liability in the event of an accident.