There are tons of reasons why leasing a vehicle might be a better option for you than buying one outright, but when it comes to insurance, there are some differences to note. If you’ve never insured a leased vehicle before, the process might seem a bit unusual since there are some additional factors to consider.
Read the Lease Agreement Carefully
Each lease agreement is different, so you should always be sure to read the agreement, and its fine print, carefully. Some leasing companies require that you have specific coverage amounts on the car, and they could be vastly different than the minimums in your area. The leasing company could also require that you have a specific deductible on your policy. Often policies with higher deductibles have lower premiums, but your leasing company may want to ensure that you have a low deductible, just in case. If you insure the car for less coverage than the leasing company requires, you may be subject to penalties.
Let the Insurance Agent Know It’s a Lease
Some insurance companies have different options available for leased vehicles than they do for owned or financed vehicles. For that reason, it’s especially important that your insurance company knows you’re leasing the car. Odds are good that they will ask you this when setting up the policy, but it’s good to make sure, just in case. You could qualify for specific discounts or coverage, such as gap insurance that covers the remainder of your lease in case the car is totaled or otherwise damaged.
List the Leasing Company on Your Policy
It’s important that your insurance company has the name and address for the leasing company on file. If you are ever in an accident, the insurance company notifies the lease company for you. They also notify your lease company of any other information as well, such as changes to your policy or payment information. This helps to ensure that you’re covered under the terms of your lease, because the leasing company needs to verify your coverage and the easiest way to do that is with an open line of communication to your insurance company.
Your insurance provider can walk you through covering your leased vehicle properly. He might even have additional options for you to make it more budget-friendly, so make sure you have a copy of your lease on hand so he can ensure you’re in compliance.