Leased vehicles generally have higher car insurance requirements than those of a financed vehicle. Most lease agreements require that the lessee (person who signs the lease) obtains higher limits of liability coverage along with low physical damage (comprehensive and collision) deductibles.
Since the vehicle being financed is still technically owned by the leasing company, they can be held responsible for damages caused with that vehicle; therefore, high limits of liability coverage helps protect the leasing party against any legal lawsuits.
What coverage is required for leased vehicles?
Leased vehicles usually require that the lessee purchase the following:
- $100,000 per person bodily injury liability coverage which pays for other’s injuries as a result of an at-fault automobile accident.
- $300,000 total bodily injury liability coverage if multiple injured persons. This is the limit of money that the insurance company would pay out for other’s injuries caused by the insured.
- $50,000 property damage liability. This coverage pays for damages caused to any property including, but not limited to vehicles, a fence, a light post, etc. The limit is on a “per accident” basis.
- Physical Damage coverage covers damages caused to the leased vehicle itself. Physical damage coverage is broken down into two sections, “Comprehensive” which covers damages to the vehicle caused by anything other than an actual car accident and “Collision” covers damages related directly to an accident.
Physical damage coverage comes with “Deductibles” which are what an insured would be held responsible to pay toward vehicle repairs. Deductibles can be different for comprehensive and collision coverage but are usually the same.
The high limits of liability as shown above are generally shown on a policy as 100/300/50. The digits represent the amount of coverage in thousands.
Aside from higher liability coverage requirements, leased vehicles usually require that one obtains a maximum comprehensive and collision deductible of $500; although, there are exceptions with few leasing companies.
Most lease agreements show the exact insurance requirements on the reverse side under “agreement to furnish insurance”. There you can see the exact limits of liability and deductible requirements. Keep in mind, there are benefits to purchasing this higher coverage for your vehicles. In case of an accident, you can have the satisfaction of knowing that your coverage will be more sufficient.
Feel free to obtain a free quote on leased vehicle coverage as well as any other coverage instantly online. OnlineAutoInsurance.com lets you fill out one simple form and instantly make an online car insurance comparison of various company rates.