When leasing a car, you are required to have full-coverage auto insurance, which means not only legally-required liability coverage but also collision and comprehensive coverage.
Since your lease contract specifies exactly what amount of coverage is required, it might cost more than you would otherwise pay.
Car Insurance for Leased Vehicles
You are required by your car lease contract to carry full-coverage auto insurance for the life of the lease. It’s for your protection, but it also protects the lease company’s ownership value in the car itself.
Minimum liability coverage is determined by financial responsibility laws in each state, but your lease finance company will nearly always require higher minimums, since state minimums are antiquated and grossly inadequate in these days of large accident law suits.
For example, your contract may state that you need $20,000/$40,000/$5000 coverage as a minimum. This means $20,000 for each person injured, $40,000 for a single accident, and $5000 for property damage. Other lease companies may require much higher minimums such as $150,000/$300,000/$30,000.
The amount of collision and comprehensive coverage is not specified as an amount but simply states that it should cover the value of the vehicle, which is what that type of coverage provides for any vehicle. A maximum deductible is usually specified, typically no more than $1000.
Because car insurance rates vary widely between providers, we recommend shopping for rates at multiple companies. One of the best ways to do that is online using a respected service such as NetQuote.com that can show you rates from several companies at the same time. No need to go to separate insurance companies to get rate quotes.
Your lease contract should also contain a “waiver” clause somewhere in the fine print which states that you will not be responsible for additional money after your insurance has paid in the case of your car being totaled in an accident or being stolen and not recovered. This is sometimes called GAP protection or GAP insurance. It’s normally provided at no additional cost, although sometimes it’s now offered as an option. If an option, it’s always best to purchase it.