Car Lease Insurance: Things to Know

Any time a driver takes a vehicle in a leasing agreement there are some specific things to keep in mind about the car lease insurance that he or she will need to take out on the vehicle for the duration of the lease period.

• Driver responsibility - the driver is most often responsible to take out the required insurance on the vehicle to protect the investment of the leasing company. The leasing company still owns the vehicle, but because it is in the hands of the driver, that driver will need to do the paperwork to insure it against any liability.
  
  
• Basic liability - "basic liability" insurance is what is legally needed to get a car on the road. However, basic liability insurance will not cover damage to the vehicle in the event of a crash, or other adverse circumstances.
  
  
• Comprehensive insurance - comprehensive insurance will cover things like flooding and vandalism. Leasing companies offer our comprehensive insurance to be in place for a leased vehicle.
  
  
• Gap insurance - although comprehensive insurance covers a lot of different eventualities, it only covers the blue book value of the vehicle or the amount that the vehicle is worth on the market. It does not cover any additional investment that the leasing company may have made. Gap insurance is a specific policy that covers the difference between investment and the market value of the vehicle. Leasing companies often also require gap insurance for a leased vehicle.
  
  
• Deductible limits - a leasing company may also set deductible limits for any of the above kinds of insurance. For example, many companies require no more than a $500 deductible by comprehensive insurance or other insurance types.

Keep these relevant facts in mind when leasing a vehicle to make sure that you have protected the leasing company's investment.