Car Insurance When Leasing: Everything You Need to Know

Leasing a car has become an increasingly popular option for those who don’t want to commit to the cost and maintenance of owning a vehicle. However, leasing a car also comes with unique requirements for car insurance. In this comprehensive guide, we’ll go over everything you need to know about car insurance when leasing a car.

What is Car Insurance When Leasing?

When you lease a car, you are essentially renting it for a certain period of time. During this time frame, the leasing company or dealership still owns the car and therefore requires you to have a certain level of car insurance coverage. If you were to get into an accident, the insurance would cover the damages to the car.

Unlike owning a car, where you have the option to choose your desired car insurance coverage, when you lease a car, the leasing company will typically require you to have specific coverage levels. This is because they want to make sure that if an accident were to occur, their asset (the car) is fully protected.

Let’s take a closer look at the specific car insurance requirements when leasing a car.

Car Insurance Requirements When Leasing a Car

The car insurance requirements when leasing a car can vary depending on the leasing company and state you are in. However, there are a few common requirements that you should be aware of.

1. Liability Insurance

Liability insurance is the most basic type of car insurance and is required by law in almost every state. It covers damages and injuries that you may cause to others in an accident. When leasing a car, the leasing company will typically require you to have a minimum amount of liability insurance. This amount can vary, but it’s usually around $100,000 per person and $300,000 per accident.

2. Collision Insurance

Collision insurance covers damages to your leased car if you get into an accident with another car or object. When leasing a car, the leasing company will typically require you to have collision insurance with a deductible of around $500.

3. Comprehensive Insurance

Comprehensive insurance covers damages to your leased car that aren’t caused by a collision, such as theft, vandalism, or natural disasters. When leasing a car, the leasing company will typically require you to have comprehensive insurance with a deductible of around $500.

What Happens if You Don’t Have Car Insurance When Leasing?

If you don’t have car insurance when leasing a car, you could face serious consequences. Not only would you be in violation of your leasing contract, but you could also be held financially responsible for any damages or injuries that occur in an accident.

In addition, if you don’t have car insurance when leasing, the leasing company may require you to purchase their own insurance policy. This policy may be more expensive than if you were to buy car insurance on your own.

Frequently Asked Questions About Car Insurance When Leasing

1. Can I Keep My Current Car Insurance When I Lease a Car?

It depends on the specific car insurance policy you have. Some car insurance policies will cover you when you lease a car, while others may not. It’s important to check with your car insurance provider to see if you need to make any changes to your policy.

2. Can I Change My Car Insurance Coverage When I Lease a Car?

You may be able to change your car insurance coverage when you lease a car. However, you will need to make sure that the new coverage meets the minimum requirements of the leasing company.

3. Can I Lease a Car Without Car Insurance?

No, you cannot lease a car without car insurance. The leasing company will require you to have car insurance before you can drive the leased car off the lot.

4. What Happens if I Get Into an Accident When Leasing a Car?

If you get into an accident when leasing a car, you should contact your car insurance provider as soon as possible. They will guide you through the claims process and help you get the necessary repairs done.

5. Can I Add Other Drivers to My Car Insurance Policy When I Lease a Car?

Yes, you can usually add other drivers to your car insurance policy when you lease a car. However, you will need to make sure that the other drivers are covered under the minimum requirements of the leasing company.

Conclusion

Leasing a car can be a convenient and cost-effective option for many people. However, it’s important to understand the specific car insurance requirements when leasing a car. By having the right level of car insurance coverage, you can ensure that both you and the leasing company are fully protected in the event of an accident.