What type of car lease insurance will my leasing company require?
Leasing companies will typically require you to carry physical damage coverage for your leased vehicle, commonly known as comprehensive and collision coverage.
- Collision coverage: Pays for damage caused in an accident with another vehicle or an object, such as a telephone or utility pole. Collision coverage applies even if you cause an accident.
- Comprehensive coverage: Pays for damages caused by events outside of your control, including weather and acts of nature, theft, vandalism, fire, and accidents involving animals.
Many lessors will also require you to carry higher bodily injury liability limits, typically $100,000 per person and $300,000 per accident. You may also need a set amount of property damage liability coverage, often around $50,000.
What are the state requirements for insurance on a leased car?
The type and amount of car insurance required varies from state to state, but the state 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: Covers medical expenses for others injured in an accident for which you are found at fault. Minimum coverage per person and accident varies by state.
- Property damage liability: Covers damage to another person's property in the event of an accident. Minimum coverage per accident varies by state.
Learn more about liability insurance.
Some states also require uninsured/underinsured motorist coverage and medical payments coverage or personal injury protection, all of which can cover medical expenses for you and your passengers after an accident.
Do I need gap insurance for my leased vehicle?
In addition to coverages like collision and comprehensive, gap insurance can often be beneficial in the event of an accident. Many lessors require gap insurance for a leased car since new vehicles depreciate quickly once driven off the dealer's lot. Gap insurance covers the difference between the amount you owe and the actual value of the car. In the event of an accident where the vehicle is totaled, gap insurance can help you pay off the remainder of your lease. This is also known as loan/lease payoff coverage at Progressive.
Is leased car insurance more expensive?
Since the insurance requirements for a leased car are typically greater, it can cost more to insure a lease compared to a financed or owned vehicle. However, leasing a vehicle may give you lower monthly payments than financing, so there is a trade-off between car payments and insurance rates. Your lessor might also require a specific deductible amount for comprehensive and collision coverage, which will influence your insurance rate.
How can I lower my leased insurance cost?
Even if your lessor has strict requirements regarding your insurance coverage, there are steps you can take to reduce your auto insurance rate. Here are a couple of tips to help you save:
- Shop around: Determine which insurer can help lower your car insurance rate with added discounts.
- Consider bundling: Many companies, like Progressive, offer discounts when you bundle your auto policy with your home or renters insurance. See how you can save by bundling insurance policies.
How to insure a leased car through Progressive
Looking for more information about auto insurance? Our car insurance resource center has you covered.