Car leases are popular among those who enjoy driving new vehicles but do not want to make the larger payments that come with financing a car. However, whether you buy or lease your vehicle, you must have insurance on a leased vehicle. Car owners are probably already familiar with the process of insuring their vehicle: look for the best policy and insurance company, agree to the terms, and retrieve the insurance card.
The type and amount of car insurance required vary by state, but the requirements are the same whether you lease, finance, or own your car outright. The vast majority of states require some level of liability coverage, including bodily injury liability, which covers medical expenses for others injured in an accident caused by you. The amount of coverage required per person and per accident varies by state. Property damage liability, on the other hand, covers damage to another person's property in the event of an accident. The amount of coverage required per accident varies by state.
Some states also require uninsured/underinsured motorist coverage, as well as medical payments coverage or personal injury protection, which can cover medical expenses for you and your passengers in the event of an accident. In addition to collision and comprehensive coverage, gap insurance can be useful in the event of an accident. Gap insurance covers the difference between what you owe and the car's actual value. In the event of a totaled vehicle, gap insurance can assist you in paying off the remainder of your lease.
When you sign a lease, you agree to meet insurance requirements for the duration of the lease. Knowing the ins and outs of the leased vehicle insurance purchasing process makes the leasing process more efficient and less stressful. Here are the steps to take to provide proof of insurance:
Choose the best vehicle for your needs.
Inquire with your leasing company about the minimum insurance requirements.
Determine whether you require any additional coverage (like gap insurance).
Shop around for a car insurance policy.
Purchase insurance and have your insurer email or fax proof of insurance to you or your leasing company. This can be done over the phone or online, at the dealership or ahead of time (if you know the Vehicle Identification Number of the exact car you will be leasing).
Provide proof of insurance to the leasing company, sign your lease, and enjoy your new vehicle.
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