Leasing a vehicle can be an attractive option for many consumers, offering the opportunity to drive a new car every few years without the long-term commitment of ownership. However, it’s essential to understand the insurance considerations that come with leasing a vehicle to ensure you are adequately protected and compliant with your lease agreement.
Is Insurance Required for a Leased Vehicle? 
When you lease a vehicle, the leasing company retains ownership of the car, which means they have an interest in ensuring the vehicle is well-protected. As a result, lease agreements typically include specific insurance requirements that lessees must meet.
Leasing companies typically require lessees to carry collision and comprehensive coverage. Collision coverage may pay for damage to the leased vehicle resulting from an accident. Comprehensive coverage can protect against noncollision-related incidents, such as theft, vandalism or natural disasters. These coverages help ensure that the vehicle is financially protected against a wide range of potential risks.
Leasing companies may also require gap insurance, which can cover the difference between the vehicle’s actual cash value and the remaining balance on the lease if the car is totaled or stolen. Since leased vehicles can depreciate quickly, the actual cash value may be less than what you owe on the lease, leaving you responsible for the difference. This type of insurance can help bridge this gap, preventing significant out-of-pocket expenses in such scenarios.
Contact Us
Contact Dixon Blackwood Insurance Agency Inc. in Sumter and Summerton, South Carolina, to get appropriate coverage for your leased vehicle at favorable rates. Our agents can help tailor your auto insurance coverage to meet your unique needs.
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.