“How to Insure Your Leased Car: A Comprehensive Guide”

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What Insurance Do You Need for a Leased Car?

When leasing a vehicle, you must meet both your state’s minimum insurance requirements and the additional requirements set by the leasing company. Typically, leasing companies require more extensive coverage and higher policy limits than lenders. Here’s what you need to know.

State Requirements

Auto insurance requirements vary by state. Most states mandate liability coverage, and many have additional requirements. Common coverages include:

• Liability: Covers injuries and property damage you cause to others. Leasing companies often require higher limits than state minimums.
• Uninsured/underinsured motorist: Covers injuries and damages if an uninsured or underinsured driver hits you.
• Personal injury protection (PIP)/medical payments (MedPay): Pays for accident-related injuries to you and your passengers, regardless of fault.

Leasing Company Requirements

Since the leasing company owns the vehicle, they usually require additional coverage to protect their financial interest, including:

• Collision: Covers accident-related damage when you’re at fault.
• Comprehensive: Covers theft and non-accident-related damage from events like fires and natural disasters.
• Guaranteed asset protection (GAP): Reimburses the leasing company for the difference between your remaining lease balance and the vehicle’s market value if it’s declared a total loss.

Are Insurance Requirements Different for a Purchased Car?

Whether you lease or buy, you must meet your state’s minimum coverage requirements. Lenders typically require comprehensive and collision coverage for financed vehicles but don’t usually mandate higher liability limits or GAP coverage.

How Much Does It Cost to Insure a Leased Car?

Insurance costs vary based on factors like the type of car, driving history, location, and more. Generally, policies cost more for expensive vehicles, high-mileage drivers, and those with violations. Leasing companies’ requirements for higher coverage and limits often result in higher premiums for leased cars.

How to Get Car Insurance for a Leased Car

Getting insurance for a leased vehicle involves a few additional steps compared to buying a car:

1. Talk to the leasing company to understand their coverage and policy limit requirements.
2. Decide on the types of coverage and policy limits you want.
3. Get multiple quotes to find the best deal.
4. Choose a policy that fits your needs and budget.
5. Add the leasing company as an additional insured and loss payee on your policy.
6. Provide proof of coverage to the lessor when signing the lease agreement.

The Bottom Line

Insuring a leased vehicle is similar to insuring a purchased one, but with additional requirements from the leasing company. Ensure you meet both state and leasing company requirements for adequate coverage.

For any mortgage service needs, call O1ne Mortgage at 213-732-3074. We’re here to help you with all your mortgage needs!

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