Vehicles that are leased will require more coverage than would typically be required when purchasing a temporary auto insurance policy. Many lenders that are used by a dealership for a leased vehicle will require higher limits of coverage than a vehicle that is financed by a bank.
higher limits of coverage
The reason for these higher limits of coverage is that the vehicle is still owned by the leasing company. Higher coverage limits are needed to protect a leasing company in the event of an accident.
Coverage that you will need to purchase for a leased vehicle will include bodily injury liability and property damage liability. You will also require specific amounts for collision and comprehensive coverage. The level for required for your policy deductible will also need to be at a minimum amount. Additional coverage on the policy such as road side assistance are optional.
Bodily Injury Coverage
Bodily injury coverage will pay medical costs for injuries suffered by another person that is involved in an at-fault accident. The minimum amount of coverage that is typically required on a leased vehicle set at $100,000 per person.
A limit of $300,000 for bodily injury liability coverage is required on the policy for multiple injured persons. This will be the maximum amount that an insurance company will pay to others for any that are sustained.
Property damage liability
Property damage liability pays for any damage that is sustained to another person’s vehicle or any other property. Other property may include a fence or an outbuilding such as a garage that has been damaged by your car. This coverage typically paid by the policy on a per accident or per occurrence basis. This is typically an amount on your policy that will be set at $50,000.
Coverage for physical damage is also required on a leased vehicle. This is coverage that is seen on your policy and is known as comprehensive and collision. The amount of coverage that is required by lenders for a leased vehicle is typically set at the actual cash value. If you are involved in an accident, your insurance company will pay a lender the actual cash value of the vehicle.
You can obtain a policy for your leased vehicle online or from a local insurance agent. When you begin your search look for a captive agent or an independent agent. A captive agent will sell policies that are offered by only one insurance company. Independent agents are able to obtain policies from multiple companies that you are able to choose. Obtain a rate quote and then compare the price for each policy.
When your lease term has ended you can choose to purchase the vehicle or return it to the dealer. If you choose to purchase the vehicle, your insurance policy continues to provide coverage. A vehicle that you return to the dealer requires making a change to the policy. You may decide to cancel the policy or have the vehicle replaced with a new one if another vehicle is being leased.
The lease agreement provided by a dealer will typically include the limits of coverage you will need for your policy. You can purchase temporary auto insurance if a policy is offered by the dealer until you are able to obtain a policy for full coverage. The term for the amount of coverage that you will require on a policy for a leased vehicle is known as full coverage.