Do you need auto insurance for a leased car? Even though you may only drive your brand-new car for a few short years, you still need to protect it, and your legal and financial responsibilities, with a policy. If this is your first experience with a car lease, take a look at what you need to know about auto insurance quotes, insurance requirements, and your options.
Insurance Is A Requirement
Each state has its own insurance laws. These include the type of insurance the state requires (such as bodily injury, liability, or personal injury protection) and the minimum liability limits. Drivers must carry the minimum coverage (as required by their state) whether they own, finance, or lease their car. Failure to purchase a policy that includes the state minimums could result in a fine. Beyond the potential penalty for failure to carry coverage, an uninsured driver is at risk for steep out-of-pocket expenses in the event of an auto accident or at-fault incident.
Leases May Require Additional Coverage
Some leasing companies have separate or additional requirements for coverage. As a leaseholder, you don't own the car. Unlike financing a vehicle, a lease allows you to drive a car without ever actually owning it. At the end of the lease, you could purchase the car at the residual value. But you don't have to. This means you will drive a car that the manufacturer, car dealership, or a financial institution owns. These companies want to protect their investment and may require you to insure your car at a higher minimum or add on extra types of insurance to do so.
Insurers Can Help Lease Holders
An auto insurance company should help its customers to navigate state minimum coverage requirements and extras that may apply to leaseholders. When you get an auto insurance quote, the company representative or broker should review your dealership's or the leasing financial institution's coverage minimums and rules. The auto insurance provider can explain the different common lessor requirements, such as collision coverage or comprehensive coverage, what these policies include, and how you can save the most right now.
If you're not sure where to start your search for a new policy or this is your first experience with auto insurance, contact a qualified broker for more information. You will need some information before an agent can give you quotes or suggest policies. This info could include the manufacturer; the dealership; the financial institution that you will lease the car through; the car safety features; and the make, model, and year of the car.