When you are thinking of leasing a car, the responsibility of purchasing the auto insurance will lie entirely on your shoulders. Remember that when leasing a car, it is still the property of the leasing company. The company would want to ensure that their investment (read car) is fully covered in the event of an accident or incident. Besides, auto insurance is mandatory in most states today for any vehicle on the road.
Leasing companies also expect you to take as much liability insurance coverage as you can, should you end up being at fault in the event of an accident. Liability insurance coverage will not only protect you in the event of an accident, it will also protect the lease company from all financial responsibilities.
So whoever will be financing the car that you plan on leasing will expect you to pay for both collision and comprehensive insurance coverage for the leased vehicle. Generally, collision coverage takes care of all damages to a car from an accident as a result of a collision with an object or another automobile. Comprehensive coverage on the other hand takes care of all financial responsibilities for losses from every other thing apart from what the collision coverage covers.
The company will basically expect you to buy a liability insurance coverage of $100,000 per individual or $300,000 per incident, property liability coverage of $50,000, and collision and comprehensive coverage for total value, with a deductible of more than $500.
It goes without saying that this could be more insurance coverage than you would normally purchase, so your expense on auto insurance may end up increasing. As such, it will really pay to shop around in an effort to secure a much more affordable and manageable rate.
As any insurance expert will advice you, it is normally very easy to get a significantly higher level of coverage at the same rate in which you are paying at the moment by requesting for quotes from several insurance service providers and looking out for the different discounts that you are entitled to based on such things as your good driving history and good credit report.
In addition to the normal car insurance, when dealing with auto insurance for a leased car, there is something else known as gap insurance that you will need to pay for as well. This ‘gap’ is basically the difference between what you owe the car leasing company and what the insurance company will end up paying should the car end up being totaled. Remember that the value of cars depreciate very rapidly so when a car is being totaled, there is normally a gap between the loan amount and the fair market value of the same.
This cost of gap is normally rolled out into the payments you make on your car lease. As such, you will not necessarily have to purchase the gap policy. What happens is that the car dealer will purchase a master policy from a carrier to cover all the vehicles it plans on leasing out, and then charges its customers for the ‘gap waiver’. As such, when the leased car is being totaled, you will not have to make any gap amount payments towards the car dealer.