Insuring a leased or financed vehicle
Your lender has a say in your coverage. What they usually require and why.
When you finance or lease, the lender or lessor owns part or all of the car, so the contract requires you to protect it.
Typical requirements
- Collision and comprehensive for the life of the loan or lease.
- Maximum deductibles, commonly $500 or $1,000.
- Higher liability limits for many leases, often 100/300/50 or more.
- Loss payee or additional insured listing for the lender or lessor on your policy.
Gap coverage
Because a new car can be worth less than what you owe, many leases include gap coverage, and lenders may offer it on loans. Check your contract before you buy it separately.
If coverage lapses
If you drop required coverage, the lender can buy "force-placed" insurance and add the cost to your loan. It is usually expensive and protects mainly the lender.
When you compare quotes, bring your lender's insurance requirements so every quote meets them.
This guide is general information from Quote Pro Auto, not insurance, legal or financial advice. Coverage rules vary by state and insurer.