Insurance for a Leased Car

See If You Qualify for Lower Rates

If you're considering leasing a car, having the right insurance coverage protects your investment and ensures peace of mind on the road. At TrySmartly, we can help you navigate the search for leased car insurance.

With Trysmartly, you can start your search for leased car insurance by submitting a free online request. We help you search for a policy that fits your coverage needs at an affordable rate. Make sure you’re adequately protecting your leased vehicle – submit a free insurance request today.

Do You Need Special Insurance for a Leased Car?

When you lease a car, you typically need to have an insurance policy that meets the leasing company's requirements. There isn't a distinct "special" insurance type for leased cars. Instead, lessees will be required to obtain either a minimum coverage policy or more comprehensive full coverage. The leasing company will determine which coverage type you will need.

In most cases, lessees are required to have at least liability coverage, which includes bodily injury and property damage. However, the leasing company might demand more coverage, such as collision and comprehensive insurance, or even full coverage, to adequately protect both parties in the event of accidents, theft, or other damage.

Insurance on leased cars financially protects the lessee and the leasing company throughout the lease term. Lessees must understand and fulfill these insurance requirements to remain compliant with the terms of their lease agreement.

Leased Car Insurance Requirements

Leasing companies will typically have requirements for insurance when leasing a car. While requirements vary, some common elements of leased car insurance requirements include:

This is the minimum coverage required by law in most states. It helps cover the costs of bodily injury and property damage to others if you are at fault in an accident.

This coverage helps pay for damages to your leased vehicle that result from non-collision incidents, such as theft, vandalism, or natural disasters.

This coverage helps pay for damages to your leased vehicle resulting from a collision with another vehicle or object.

The leasing company may specify the minimum coverage limits you must carry for liability, comprehensive, and collision coverage.

The leasing company may require that they be listed as an additional insured on the policy. This ensures that they receive proper notification in case of any changes or cancellations to the policy.

While not always required, leasing companies may strongly recommend gap insurance. Gap insurance covers the difference between the outstanding lease balance and the actual cash value of the leased vehicle in the event of a total loss. It helps protect you from potential financial burdens if the car is totaled or stolen.

Do You Need Gap Insurance for a Leased Vehicle?

Gap insurance is highly recommended for a leased vehicle, and in many cases, leasing companies may require it as part of the lease agreement.

Gap insurance covers the difference (the "gap") between the outstanding lease balance and the actual cash value of the leased vehicle. For example, suppose you’ve leased a car, and a year later, the car is declared a total loss in a car accident. Basic insurance might only cover the current value, leaving you responsible for the remaining lease balance. Gap insurance helps cover the costs in these situations so that you are not left with a significant financial burden.

Is It More Expensive to Insure a Leased Car?

Insuring a leased car can be more expensive than insuring a car you own outright. There are several reasons for this:

Leasing companies often require higher insurance coverage limits, such as higher liability limits and comprehensive and collision coverage. These higher coverage requirements can result in higher insurance premiums.

Leasing companies typically recommend or even require gap insurance. While this provides valuable protection, it adds to the overall insurance cost.

Leased cars are usually newer, and their value is higher than older cars. Insuring a higher-valued vehicle can result in higher premiums due to the added replacement costs.

While all these factors can influence your leased car insurance rates, you may still be able to find affordable coverage. Submit your free online request today with TrySmartly. You could save in minutes without sacrificing coverage.

How to Save Money When Leasing a Car with Insurance

Saving on premiums when leasing a car is possible with smart strategies and careful consideration of your coverage needs. Here are some tips to help you keep insurance costs manageable while ensuring adequate protection:

Shop Around for Quotes: Obtain quotes from multiple insurance providers to compare prices and coverage options for your leased car. Each insurance company evaluates risk differently, so shopping around allows you to find the best deal for your specific needs.

Bundle Insurance Policies: If you have other insurance policies, such as home or renters’ insurance, consider bundling them with your car insurance. Many insurance companies offer discounts for bundling multiple policies with them. Customers could save between 10% to 25% by bundling policies. The exact savings can depend on the insurer's specific policies and the chosen level of coverage.

Consider Higher Deductibles: Opting for higher deductibles on your insurance policy can lower your monthly premiums. Just be sure to choose a deductible amount that you can comfortably afford to pay out of pocket if you need to make a claim.

Maintain a Good Credit Score: Maintaining a solid credit score can often result in better insurance rates. To achieve this, pay your bills on time, aim for low credit card balances, diversify your credit types sensibly, and minimize new credit applications. Additionally, settle any outstanding debts and monitor your credit reports regularly for accuracy. Following these steps will help you manage your finances responsibly and enhance your creditworthiness.

Drive Safely: Maintaining a clean driving record can help you qualify for lower insurance rates. Avoid traffic violations and accidents to keep your leased car insurance premiums down.

Drive a Safer Car: Some cars have better safety ratings and are less likely to be involved in accidents or sustain significant damage. Leasing a car with high safety ratings can result in lower insurance premiums.

Review Your Coverage Annually: As your circumstances change, your insurance needs may change too. Review your insurance coverage annually to ensure it still aligns with your requirements and make adjustments as necessary.

Submit a free online request today to see if you could save on leased car insurance.

Leased Car Insurance FAQ

When looking into leased car insurance, questions are bound to pop up along the way. We’ve compiled a list of frequently asked questions about car insurance for a lease below.

Can I Transfer My Existing Insurance to a Leased Car?

Yes, you can typically transfer your existing insurance to a leased car. However, you might need to update your coverage to meet the leasing company's specific requirements. This can include liability, comprehensive, collision, and gap insurance. You might also need to list the leasing company as an additional insured or loss payee on your policy.

What Happens if I Terminate the Lease Early?

If you terminate a lease early, you may still be responsible for the remaining lease payments and associated fees. You'll also need to arrange for insurance coverage until you return the leased car.

Is it Possible to Modify the Insurance Coverage During the Lease Term?

During the lease term, you may have the flexibility to modify your leased car coverage to better suit your needs. For example, you can adjust coverage limits, add or remove optional coverages, or change deductibles.

However, it's advised to communicate with the leasing company and ensure that any modifications still comply with their insurance requirements. They may have specific guidelines that must be followed to protect their interests in the leased vehicle.

How Does the Leasing Company Handle Insurance Claims?

In the event of an accident or damage, you'll need to report the claim to your insurance company. The insurance company will then handle the claim process according to the terms of your policy and communicate with the leasing company as needed.

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