A Complete Guide To Insuring A Leased Vehicle

The insurance required for a leased vehicle is different from that of an owned vehicle. Before you lease a car, make sure you know how to insure it.

What Insurance Is Required For A Leased Car?

Leased car insurance requirements include coverages required by law and coverages required by the leaseholder. The following are the insurance coverages that are required by law:

• Bodily injury liability coverage
• Uninsured motorist coverage 

The bank or leasing company for your leased car will require that you have adequate insurance to protect its financial interest in your leased car. Lease insurance requirements may include:

• Collision insurance
• Comprehensive insurance

Other insurance types to consider are underinsured motorist coverage and personal injury protection.

Do I Need Higher Liability Limits Than The State Minimum?

While Missouri sets state minimums for insurance, leasing companies typically require higher liability limits, along with additional coverages. 

What Is Gap Insurance And Why Is It Crucial For A Lease?

Gap insurance is also known as guaranteed auto protection (GAP) insurance. This insurance helps cover the difference between the insurance payout for a totaled vehicle and the remaining loan or lease balance. Many leasing companies include gap coverage automatically in your lease payments.

If your leased car is totaled, gap insurance for a lease will help pay off the remaining balance on your lease. If you intend to lease a car, ask your leasing company whether gap coverage is included in your contract.

Understanding Key Terms: “Additional Insured” And “Loss Payee”

Here are a few common insurance terms you should know related to leasing:

• Additional insured: The additional insured is another person or entity, besides the primary policyholder, protected under an insurance policy. If you lease your car, the leasing company may sometimes be included as an additional insured. 
• Loss payee: The loss payee is the entity that receives payment from an insurance claim. In the case of a leased vehicle, the leasing company will be the first loss payee, before the policyholder.

How To Get The Right Insurance For Your Leased Vehicle

If you’re leasing a vehicle, here’s a quick guide to getting full coverage for a leased car:

1. Understand insurance requirements: Talk to your leasing company about their specific requirements, so you know what to look for in advance. 
2. Explore policies: Once you know what insurance you need, you can start gathering quotes. Talk to your insurance provider about specific requirements from the leasing company.
3. Purchase a policy: Choose the best policy for your needs, then obtain it and get proof of insurance. You’ll need to provide proof of insurance to the leasing company to finalize your agreement.

Find The Perfect Coverage For Your Leased Car

If you plan to lease a car, contact us at David Pope Insurance Services, LLC to learn more about obtaining car insurance that can offer you the financial protection you need. Or find what’s available to you fast by requesting a free quote.