Car Leasing With Insurance: A Comprehensive Guide
You’ll usually need collision and comprehensive coverage when you lease a vehicle. You might need to pay more than you would if you own your car, but you can still find plenty of great deals. It’s a good idea to get quotes from several companies, look for available discounts, and think about the factors that could influence your insurance rates.
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UPDATED: Apr 29, 2022
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- Full insurance coverage is usually required to lease a vehicle
- As long as it meets lease car insurance coverage requirements, you can choose insurance from any company
- GAP insurance or a low deductible may also be required
Obtaining car insurance can often be a tedious process, and you may have some questions about car insurance for leased cars. When you lease a vehicle, you rent it for a predetermined period of time, usually two to four years. You make monthly payments and return the vehicle at the end of the lease term.
We’ll make car leasing with insurance easier to navigate with this comprehensive guide. Let’s take a close look so you can learn more about getting a car lease, including insurance requirements.
Do you need insurance when leasing a car?
You may be wondering, “What insurance do I need for a leased car?” When you lease a car, you have to get auto insurance. Even though you don’t own the vehicle, you must meet the lessor’s minimum insurance standards. You won’t be able to drive off the lot without coverage. Many states have minimum insurance requirements, and more costly vehicles are usually more expensive to insure.
Most leasing companies require drivers to list them as an additional insured and loss payee. This means that the business gets any insurance payout for damage to the vehicle, not the driver.
With most lessors, you’ll need collision coverage and comprehensive coverage. Collision pays to repair damage from accidents, and comprehensive insurance covers theft, storm damage, and other occurrences. Experts call this full coverage.
Leasing companies also usually require $300,000 of bodily injury liability coverage per accident, $100,000 per person, and $50,000 in property damage liability insurance. Your lessor could require GAP insurance or set a maximum deductible, as well.
Do leased cars come with insurance?
Some leasing companies offer car leases and insurance, and getting both services from the same company can be more convenient. However, you can usually save more by shopping around and comparing several car insurance quotes.
Even if you get your insurance from the same company that provides your lease, you’ll make two separate payments. Your lease may require you to get insurance, but paying for it is your responsibility.
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Does it cost more to insure a leased car?
You might also be considering, “Is insurance more expensive for a leased car?” Leasing your vehicle instead of buying won’t raise your insurance rates by itself, but leasing companies usually require full car insurance coverage. In most states, people who own their vehicles can get liability-only coverage that doesn’t pay for damage to their vehicles. They can make lower monthly insurance payments, but they could have to pay for major repairs after an accident.
Many factors can impact the cost of car insurance, including:
- The amount of coverage you choose
- Where you live
- Your age
- Your driving record
- The number of miles you drive each month
- Your credit history
Your gender, occupation, marital status, and education level can also affect the amount you pay.
How can drivers lower their premiums?
Even if you need full coverage because you’re leasing your vehicle, there are several ways to lower your insurance rates. Many companies offer a discount for people who pay for insurance a year or six months in advance instead of making monthly payments. Choosing a larger deductible can also reduce your payments.
Many states and insurance providers offer inexpensive defensive driving courses, and taking one can lower your car insurance rates. Driving a vehicle with lots of safety features and avoiding a long commute can help you save money, too. Some companies even offer discounts for students and seniors.
How are auto claims handled for leased cars?
With a leased car, the check from the insurance company will usually have your name and the name of the lessor or the body shop. Sometimes, only the body shop will be on the check. If you want to take your vehicle to a different body shop, you can ask your insurance company to issue a new check. If another driver’s insurance is covering damage, the check will go to you, whether you lease or not.
When you have a lease, car insurance requirements are often stricter than those for people who own their vehicles. Fortunately, affordable insurance is available even when you need full coverage.
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