Car Insurance for Leasing and Renting

Car Insurance For Leased Cars

If you lease a car, then you won't have as many options when it comes to car insurance as you would with a vehicle you completely own. The same is usually true if you carry a car loan on a vehicle.

You Need Collision Car Insurance

Collision car insurance covers the costs of damage to the vehicle due to an accident with other vehicles, or stationary objects like telephone poles and buildings. Because the car you are leasing is likely worth much more than you have paid for it, collision car insurance is required to insure that the company you are leasing from can get their money back in case of an accident.

Comprehensive Car Insurance is Mandatory

In addition to collision, you will also need to purchase comprehensive car insurance. This type of insurance covers damage done to your car though something that isn't covered by collision insurance. For instance, damage by animals, fire, earthquake, theft or even missiles (let's hope that never happens). The reason it is mandatory is the same reason that collision car insurance is required; car insurance companies want to make sure they can recoup their losses should an accident happen.

Gap Car Insurance is Critical

Gap car insurance covers the difference between the amount you can receive for a totaled vehicle and the amount still owed on the lease. This kind of insurance is important because in most cases, cars depreciate much faster than they are paid off. Without gap car insurance, you would likely still have to pay off a portion of your car loan that wasn't covered through collision and comprehensive car insurance.

Most of the time, gap insurance is included in your lease payments, but make sure you find out for sure.

Car Insurance for Rented Cars

Most of the time, rented vehicles are covered under the car insurance plan for your own vehicles. However, before you rent a car, contact your car insurance company to make sure that rental cars are covered.

Credit Card Companies May Provide Rental Car Insurance

In some cases, you credit card company may provide car insurance for rented vehicles, as well as other rental car benefits. If you have multiple credit cards, call each company to find out what kind of benefits you are eligible for.

Getting Rental Car Insurance from the Rental Company

Usually, if you are not covered for a rental vehicle under your own insurance plan, you can get rental car insurance from the rental company. This insurance can cover damages done to the vehicle, called "Collision Damage Waiver", can cover damages done to other vehicles and passengers (liability insurance), can cover medical costs related to yourself on your passengers (Personal Accident Insurance), as well as coverage of your personal property that might be stolen from the vehicle. Home owners or renters insurance may also cover the cost of stolen items.

Another Option - Non-Owned Car Liability Insurance

If you rent vehicles fairly often and are not covered under your own car insurance plan for rental vehicles, consider getting non-owned car liability insurance. This kind of insurance costs from $300-$500 / year, and provides car insurance for you in vehicles you don't own, such as rental vehicles. This car insurance typically does not provide collision insurance, so you may need to complement the coverage your receive through these plans with some of those offered by the rental company.