Lease Car Insurance

Lease car insurance is mandatory with lease agreements and must comply with a state's vehicle protection standards. Consumers searching for lease auto insurance may find a variety of services online, through the yellow pages of the local directory, or from referrals by friends and family. A policy may require more coverage than basic liability protection, and those leasing a vehicle from a dealership should become familiar with the additional costs involved with obtaining this type of policy. Also, consumers leasing an automobile should check with their state's necessary criterion.

When leasing any kind of vehicle, leaseholders will have to provide their own lease car insurance. Dealerships and lending agencies will require that auto leaseholders obtain basic lease auto insurance plus collision and comprehension coverage. Collision coverage pays for any damage to the automobile that is caused by another vehicle. Comprehension coverage will take care of damage to the vehicle that was caused by a natural mishap, such as hail or falling debris. Comprehension protection for automobiles also covers theft of the vehicle or any damage as a result of vandalism. The agency leasing the car will inform car leaseholders of the required needs and will ask for proof of purchased coverage.

An agreement for an automobile may also require a special policy referred to as "gap" insurance. If a vehicle is in an accident, and is totaled, or damaged beyond repair, then gap coverage will protect the dealership or lending agency leasing the vehicle. Gap protection covers the difference between the dollar amount owed on the vehicle and the dollar amount of pay off. Because vehicle agencies take depreciation into consideration when paying off a totaled automobile, there could be money left on the pay-off. Gap coverage insures the lending or leasing institution complete payoff in the case of an extreme accident. Generally, gap protection is included in the monthly lease note or monthly car payment when the car is leased to a consumer.

Most states in the United States have car insurance requirements. It is illegal to drive a car without coverage, and this includes lease car insurance also. When leasing an automobile, the leaseholder may pay more in lease auto insurance than the state's basic requirements. Before leasing an automobile, it is wise to investigate insurance requirements for the state in which the auto is being leased. Also, speak with the agency leasing the car, and ask for insurance estimates and requirements. "The wisdom of the prudent is to understand his way: but the folly of fools is deceit" (Proverbs 14:8).