What You Need To Know When Purchasing Insurance For A Leased Vehicle

Leasing a vehicle can be a great option for people who want to have a new car every few years without having to take on a loan. However, purchasing insurance for a leased vehicle can be a bit different than buying coverage for a car you intend to own. Here are some things you should know about auto insurance before leasing a vehicle. 

Gap Coverage

Gap coverage is intended to protect you in the event of a total loss on a new vehicle. Without it, you'd be responsible for the difference in what you owe on the lease and the current value of the vehicle. This protection is particularly important if you are leasing a new car, as the total value of the car may be considerable. Before you contact your insurance company about purchasing this coverage, be sure to check your lease. In some cases, gap insurance is included in the lease agreement. If it is included on yours, you won't need to purchase additional coverage.

Required Coverage

When leasing a car, you'll still need to abide by your state's requirements for liability insurance. You can select the minimum amount allowed under state law, but you may decide to opt for more insurance to protect yourself in the event that you cause an accident while driving the leased vehicle. Your insurance agent can help you to determine how much you need to drive your car legally and whether or not additional coverage is right for you.

Comprehensive And Collision Coverage

Some types of insurance may not be required by law, but they may be required by the company issuing your lease. One example of this is collision coverage. Collision insurance helps cover the cost of damage to your vehicle in an accident, and it typically applies regardless of who is responsible for the crash. With collision insurance, you'll pay a deductible and the insurance company will cover all or a portion of the remaining repair costs. Your lease may also require you to cover comprehensive coverage, which also covers damage to the vehicle. Comprehensive coverage, however, covers damage not related to an accident, such as vandalism or falling tree limbs.

If you aren't sure about the different types of coverage you will need, or if you are concerned about cost, contact your auto insurance agent. He or she can review the type of vehicle you wish to lease as well as your current coverage to help find a collection of policies and riders that meet your needs. You can then use this information to determine if leasing a car is the right option for you.