Vehicle leasing has exploded in popularity over the past decade because it allows motorists to drive a new car every few years at an affordable price. However, although leasing lets you avoid the burden of owning the vehicle in question, it does not relieve you of the responsibility of insuring it. In fact, you may need additional types of auto insurance coverage to protect yourself financially. Below is a brief look at the types of insurance you should consider if you lease a vehicle.

Auto Insurance for Leased Cars

Full Coverage

When you own a car, you can decide how much coverage above the legal minimum you need. However, with a leased vehicle the dealership or any other lien holder can (and will) require you to maintain full coverage. This normally includes collision and comprehensive insurance. Collision coverage pays to repair any collision damages, while comprehensive coverage covers any non-collision losses, such as those caused by fire, flood, vandalism, or theft.

Some lessors have additional requirements, such as limits on liability coverage that exceed state minimums, while others limit the size of your insurance deductible. Thus, although leased vehicles are not by definition more expensive to insure, you may pay more for auto insurance on a leased vehicle than you would pay for one that you own.

Gap Insurance

Another consideration with leased vehicles is gap insurance. If you should total the car within a short time of commencing the lease, you could conceivably end up owing more on the vehicle than you receive in insurance. This is because the value of a new car depreciates more rapidly than your monthly lease payment can keep up with. Gap insurance covers the vehicle’s depreciated market value when a collision occurs. For instance, if you total your $40,000 leased car a week after driving it off the lot, and the insurance company states that the car’s value is $35,000, your gap insurance policy will cover the $5,000 gap. Some policies even contribute an additional amount to cover the down payment of your next vehicle.

To buy affordable gap coverage and auto insurance for your leased vehicle, see Dewey Beckner with Allstate Insurance Companies in High Point, NC. Dewey has served clients in and around Guilford County for more than 20 years and also carries motorcycle, homeowners, and renters insurance. Read reviews from satisfied clients online or call (336) 884-5636 to request an insurance quote.