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Auto Insurance for a Lease Car

If you are leasing a car you will still be required to have an auto insurance policy. It is mandatory in many states to have a minimum amount of coverage for auto liability insurance.

Auto dealers will also require that you have comprehensive and collision insurance on the leased vehicle as part of the terms or contract, to cover the cost of the vehicle if it is damaged while in your use.

Collision insurance covers the vehicle if it is involved in an accident with another vehicle, or it hits an object, such as a tree for example. Comprehensive insurance will cover the vehicle if it is damaged by an accident that doesn’t involve a collision, such as fire, vandalism, theft or hitting a deer.

Many leasing companies state that the person leasing the vehicle must have gap insurance, what gap insurance does is covers the gap between the amount paid by the insurance company, and the amount that is owed on the vehicle if it is involved in an accident and is deemed irreparable.




When you receive payment for a vehicle that has been written off payment is calculated by the market value of the car, and as everyone knows once a vehicle has been purchased it instantly drops steeply in value. Gap insurance will cover the amount left over to pay the leasing company, if the amount owed on the car is more than its market value.

Often gap insurance is included in the lease payments with most vehicles, because the car dealer buys a policy that covers all of their cars. In this case if the car is written off you will not be responsible for the gap payment. Although it is a good idea to ask the leasing company about what they cover and what you will need to get insurance for.

When it comes to obtaining auto insurance for a lease car, there are now car insurance company operations now in business that specialize in providing consumers with this type of car insurance. Because more and more people are leasing autos today, there is an ever growing number of companies that do specialize in this type of car insurance, that specialize in car insurance for people who lease their autos.

If you want more information about car insurance for a vehicle that you lease, you will want to contact a car insurance company directly or contact an agent that specializes in this type of coverage. Finally, there are now materials available at the insurance commissioner's office in your state that can assist and aid you in making decisions about car insurance for a vehicle that you do lease.





 

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