Know How to Insure a Leased Vehicle

by Dov Waxman

Many people often confuse on how to insure a leased vehicle. There are large numbers of people who feel difficult to decide which type of insurance coverage suits their leased vehicle from various types of auto insurance coverage emerging in the market. Most often this auto insurance coverage suits a vehicle that is being purchased rather than a leased vehicle.

While purchasing vehicles on lease is a highly cost-effective method of acquiring vehicles for business, there are only few leasing companies that offer auto insurance in the lease agreement. In most cases, the lessee has to bear the responsibility of insuring the vehicle. Here is what you need to know while insuring a leased vehicle.

The following are the types of auto insurance coverage required for a leased vehicle:

Minimum liability coverage: You need to have at least minimum liability coverage as per your state-minimum levels. This will help you from being sued for property damages.

Collision insurance coverage: This coverage helps you pay for the damages caused to your vehicle when you collide with another vehicle or an object. It is subject to deductible, where you need to pay money from your pocket in case of claims.

Comprehensive insurance coverage: This coverage helps you pay for the damages caused to your vehicle due to fire, theft, vandalism, storm etc. Like collision coverage, comprehensive coverage is subject to a deductible.

Gap insurance coverage:
Gap insurance helps you if your leased vehicle is totaled while you are into lease contract. It will pay the differentiated amount calculated from the amount which you owe and cash value of the vehicle.

Thus, you need to consider above coverage before you decide to lease a vehicle against buying it.

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