Do car leases include insurance?
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UPDATED: Mar 19, 2020
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- Car leases sometimes include a short-term gap insurance that you can use as you find a more permanent insurance
- You should look for a more permanent insurance that will go into effect once the gap coverage term expires
- Gap insurance coverage is usually not enough to cover many accidents
Sometimes it becomes necessary to lease a car for work or personal use. Some people do this when they cannot afford to purchase a car outright. People who work for high-profile companies or people who work in sales and use their car for business may find it more feasible to lease.
Are you considering a lease and in need of insurance coverage? Use our FREE comparison tool to get your search started!
How do I determine if a leased car has insurance?
One concern for people when they lease a car is whether the car lease comes with insurance. Whether it does or not will depend on the lease company you deal with. Some lmay provide insurance as part of the terms.
Usually, this type of insurance is temporary and is sometimes rolled over into the costs of the lease. However, this is rare. In most cases, you will still have to purchase your own car insurance.
The best way to find out if a car you are leasing has its own insurance is to ask the lease company that you got the car from. In most cases, they can look it up quickly and let you know whether it came with included insurance.
However, even in cases when insurance is included in the lease agreement, it may not be enough to ensure that you are protected from every situation.
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What Most Lease Companies Require
- Collision covers the costs of an auto accident that results in a car being totaled or badly damaged.
- Comprehensive coverage includes other situations that lead to damage or loss of your vehicle, including fire, flood, vandalism, or theft.
It is understandable that lease companies have this requirement because you are not buying a car when you enter into a lease. You are renting the car for a set period and will turn in the car at the end of the lease period. The car must be in the same or similar condition when you return it.
There are some other factors to keep in mind regarding insuring your leased car. Sometimes the limits on these types of coverage are higher than if you purchased insurance for a car that you own or are financing through a finance company.
In addition, if you carry gap insurance only, you may be out money for the expenses that the gap insurance does not cover.
Lowering Your Costs with a Leased Car
The good part about insuring a leased car is that there are ways you can lower your premiums, such as driving for companies such as Uber that help people with their transportation needs, comparing insurance rates by using our site, or having regular mechanical maintenance performed on your car to ensure that it is in the best shape.
Rewards for Good Driving
Insurance companies often reward lease customers with special discounts when they have proven to take care of their leased car over time and who take the extra steps to keep it in the best condition.
It is also to your advantage to watch your driving record and keep to the letter of the law when driving. Good driving, just like bad driving, becomes a matter of your permanent driving record. A good driving record will be to your favor with regards to future savings on premiums.
Avoiding Gaps in Coverage
The most important thing to remember when dealing with insurance is that you remember to pay your premiums to avoid a gap in coverage.
The sad truth is that, even if you have paid your premiums every month, but you have one month that you did not pay, it is possible that you could have a gap in coverage.
If you do, and you have an accident during the time you were not covered, your claim will not be paid.
Scheduling Automatic Payments
To avoid a gap in coverage, you could set up your premium payments on an automatic draft, which will keep you from forgetting to pay your premiums and keep your insurance always up-to-date.
Ask the online agent when you shop and compare policies if automatic payment is an option for the policy you are considering before you buy.
How to Ensure a Smooth Transition When Leasing a Car
Before you enter into a lease agreement, there are some things you may want to do to ensure that you make a smooth transition with your insurance.
Follow these steps to make sure things get done in the best manner to avoid any problems.
- Shop and compare insurance plans and decide which one fits your needs.
- Find out if the lease company has gap insurance that you can use for a few days while starting your new policy.
- Check your state minimum coverage requirements to ensure that you have are in compliance with state laws.
- Look at any options that you wish to add.
- Once your new policy for your leased car is in force, cancel your gap coverage or old policy.
When shopping for car insurance, start with the state minimum requirements on liability, personal injury, and property damage.
In addition, you should look into any add-ons that you think would be beneficial, such as medical coverage in the event of an accident or roadside assistance plans.
Once you’ve decided on your desired coverage amounts, compare car insurance rates online with our FREE tool below to find the best policy for you.