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How to Insure a Leased Vehicle
Leasing a vehicle offers many benefits, including potentially lower monthly payments compared to ownership and the ability to drive a new car every few years. However, insuring a leased vehicle involves some unique considerations compared to insuring a car you own outright.
Lease Requirements
When you lease a vehicle, the leasing company retains ownership, which means they have a vested interest in ensuring it is adequately protected. As a result, most leasing agreements come with specific insurance requirements that you must meet.
Leasing companies often require comprehensive and collision coverage in addition to liability coverage. Comprehensive coverage can cover noncollision-related incidents such as theft, vandalism and natural disasters, while collision coverage can cover damage resulting from an accident with another vehicle or object.
Many leasing companies require guaranteed asset protection (GAP) insurance. This coverage can help bridge the gap between the vehicle’s actual cash value and the remaining balance on your lease in case of a total loss.
Review your lease agreement carefully to understand the specific insurance requirements. Failing to meet these requirements can result in penalties or even the termination of your lease.
Additional Coverage
Consider adding uninsured and underinsured motorist coverage to your policy. This coverage can protect you if you are involved in an accident with an at-fault driver who does not have sufficient insurance to cover the damage. Given the high number of uninsured drivers on the road, this coverage can be invaluable in ensuring you are not left with significant expenses after an accident.
Depending on your needs, your agent may recommend tailoring your auto insurance to include roadside assistance, auto glass coverage, and rental reimbursement.
Contact Us
Contact Pan American Insurance for a personalized auto insurance quote.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.
Categories: Auto Insurance, Blog