Insurance Requirements When Leasing a Car

If you lease your car, you need to make sure you hold the minimum car insurance coverage, or you'll be in breach of your contract and may need to return your car.

By Tina Chang

Updated 6 July 2022

Insurance Requirements When Leasing a Car

Sections on this page

Common Insurance Coverage Requirements for Leased Vehicles
Insurance Requirements by Leasing Company
Gap Insurance for Leased Vehicles
Why Leased Cars Have Extra Auto Insurance Requirements
Frequently Asked Questions

Depending on your leasing company, you may have specific car insurance requirements (including mandatory comprehensive and collision coverage) that differ from your state-mandated minimums. With all the documents you need to sign when you lease a car, it's easy to miss or forget about these insurance minimums, so we've outlined the basics here.

Common Insurance Coverage Requirements for Leased Vehicles

Whether you buy a used or new car or lease your vehicle, you must have state-mandated minimum auto insurance coverage. If you don't, you could risk being fined, you could have your license suspended, and the state could impound your car.

Most states have minimum coverage requirements, mainly for bodily injury liability and property damage liability. New Hampshire and Virginia are currently the only two states that do not have state minimums.

Before you're allowed to drive the car off the lot, you must show proof of your insurance. If you don't have auto insurance yet, you'll need to send proof of insurance to the financing company.

State minimum coverage typically includes:

Bodily injury liability coverage:
- $15,000 - $50,000 per person
- $30,000 - $100,000 per accident
Property damage liability insurance:
- $5,000 - $25,000 per accident

If your leasing company doesn't have its own requirements, you'll only need to meet state minimums. However, some lessors require higher liability limits plus additional coverage.

Is Insurance for Leased Cars More Expensive?

Insurance companies don't increase your premiums just because you have a leased car. Insurance may cost more when you're leasing because you're usually required to have a policy with higher minimums as well as comprehensive and collision coverage. If you were to carry the same policy with the same vehicle but without the lease, you should be paying the same amount.

Insurance Requirements by Leasing Company

Here are some additional car insurance requirements for some major leasing companies in the U.S. Always read your contract closely as minimum requirements may vary.

Leasing Company	Bodily Injury Liability	Property Damage Liability	Other
Chrysler Capital	State minimum	State minimum	Collision, fire, theft, and comprehensive
GM Financial	- $100,000 per person - $300,000 per accident	- $50,000 per person - $500,000 per accident	Collision, fire, theft, and comprehensive (max. deductible of $1,000 for each).
Honda Lease Trust	- $100,000 per person - $300,000 per accident	- $50,000 per accident	(A combined limit of $300k for both bodily injury and property damage is acceptable.) Physical damage covering the loss or damage to the vehicle (max. deductible of $1,000).
Hyundai Lease Titling Trust Additional minimums for CT, NY, NJ, RI only	- $100,000 per person - $300,000 per accident	- $50,000 per accident	(A combined limit of $300k for both bodily injury and property damage is acceptable.) Collision, fire, theft, and comprehensive (max. deductible of $1,000 each).
Infiniti Finance	- $100,000 per person - $300,000 per accident	- $50,000 per accident	Collision and comprehensive coverage (max. deductible $1,000 each).
Nissan-Infiniti LT	- $100,000 per person - $300,000 per accident	- $50,000 per accident	Collision and comprehensive coverage (max. deductible $1,000 each).
Subaru Motors Finance	- $100,000 per person - $200,000 per accident	- $50,000 per accident	Collision and comprehensive coverage (max. deductible $500 each).
Tesla Lease Trust	- $100,000 per person - $300,000 per accident	- $50,000 per accident	Physical damage for the vehicle's full value (max. deductible $2,500).
Toyota Financial Services	State minimum	State minimum	Physical damage for the vehicle's full value (max. deductible $1,000).

The leasing company will be listed as the lienholder of the vehicle, and you'll need to list it as the loss payee and additional insured on your insurance policy.

Gap Insurance for Leased Vehicles

Leasing a car may come with gap insurance at no additional cost, depending on your leasing company. You should definitely ask the dealership about this, as gap insurance comes in handy with a brand new vehicle.

If your lease doesn't automatically come with gap insurance, talk to your car insurance company about adding it to your policy. The finance manager at the dealership will likely ask you if you want to purchase gap insurance. However, you might find that adding it to your existing auto insurance policy is much cheaper.

What is Gap Insurance?

Guaranteed asset protection (GAP) insurance helps pay for your vehicle in the event of a total loss that occurs early on. When you buy a new car, the value depreciates quickly within the first couple of years, which means what you owe on the vehicle is much more than the car is worth.

Gap insurance covers the gap between what your insurance company will cover and what you still owe the leasing company.

Why Leased Cars Have Extra Auto Insurance Requirements

It's common to be required to carry comprehensive and collision coverage as well as higher liability limits with leased vehicles because leasing companies are technically the owners. They are protecting their financial interest in the car and want to account for your inability to pay in case of an accident, theft, etc.

The cost of your auto insurance policy will also vary depending on other factors such as your age, driving history, type of car you drive, and more.

Frequently Asked Questions

Do leased cars come with insurance?

No, it's your responsibility to get car insurance when you lease a car. You'll need to get the state minimum and additional coverage as required by your leasing company.

How does auto insurance work with leased cars?

Car insurance works similarly for leased cars as it does with owned or financed cars. If you have a leased vehicle, the only difference is that the leasing company needs to be listed as an additional insured party on your policy and as a loss payee. This means if the vehicle is declared a total loss, the leasing company will be reimbursed.

Do leased cars come with gap insurance?

Some leasing companies will include gap insurance in your contract, so you don't need to pay extra for it. However, not all offer this. Some will offer it to you when you're signing your leasing contract. Adding it to your existing car insurance policy is usually cheaper than paying for gap insurance at the dealership.

Can you lease a car with no collision coverage?

Some leasing companies may not have minimum collision coverage requirements, simply requiring state insurance minimums. However, many leasing companies require additional comprehensive and collision coverage for all leased car customers.

Read your contract closely to check for minimum car insurance requirements or ask for clarification at the dealership.

Is insuring a leased car difficult?

Insuring a leased car is as simple as insuring a non-leased vehicle. The only difference is that you'll need to list the leasing/financing company within your policy and ensure you have the minimum required coverages.

Your auto insurance company may automatically set your minimum coverages based on your state; however, they won't know what your leasing/financing company minimums are.