When you lease a car, your lessor will likely require you to maintain full coverage car insurance, which includes liability insurance plus comprehensive and collision coverage. Some will further require a type of coverage called “gap insurance.” A full coverage policy costs an average of $160-$200 a month, though it varies depending on the car you drive, your personal driving history, where you live and more.
What kind of insurance do you need for a leased car?
FOR A LEASED CAR YOU’RE REQUIRED TO CARRY:
ALWAYS
State-required insurance
USUALLY
Full-coverage insurance
SOMETIMES
Extras (like gap insurance)
State minimum car insurance requirements
In almost every U.S. state, you’ll need to have a car insurance policy meeting that state’s specific minimum liability requirements. Liability insurance always includes the following types of coverage:
- Bodily injury (BI): In most states, the at-fault driver’s bodily injury liability covers any of the victim’s medical bills, lost wages and other injury-related expenses stemming from an accident.
- Property damage (PD): Covers the costs of repairing vehicles and property damaged by the at-fault driver.
Liability coverage costs an average of $50-$90 a month, but you may find that your policy costs differ significantly depending on the coverage requirements in your state.
Some states have additional car insurance requirements, including:
- Personal injury protection (PIP): Covers expenses related to injuries that you or your passengers sustained in an accident.
- Uninsured motorist coverage and/or underinsured motorist coverage (UM/UIM): Covers your expenses after getting into an accident with an uninsured or underinsured driver.
- Medical Payments coverage (MedPay): Covers the cost of ongoing medical expenses regardless of fault, including hospitalization fees and funeral expenses for yourself and/or your passengers.
Keep in mind that the minimum car insurance required in your state often isn’t enough to cover damages after an accident.
Full coverage
Do you need full coverage on a leased vehicle? Typically, yes.
If you have a loan or lease on your vehicle, the lender will require
In addition to the minimum liability insurance required by your state, most car lease agreements will require you to purchase full coverage insurance to cover damage to the vehicle in case of an accident. A policy that includes liability insurance plus full coverage costs an average of $160-$200 a month.
Full coverage insurance for a leased car includes two types of physical damage protection: collision insurance and comprehensive insurance.
- Collision coverage pays for any damages to your vehicle that result from a collision, whether with another car or a stationary object. This also includes hit-and-runs and rollovers.
- Comprehensive coverage pays for damages to your vehicle that result from something other than a collision, such as vandalism, a natural disaster or theft.
This additional insurance is a good idea for most drivers, especially those with newer cars — so consider adding it to your policy even if full coverage isn’t listed in your coverage requirements.
According to Jerry data here are the average monthly cost of full coverage with some of the nation’s top insurance providers.
|
Insurance Company
|
Avg Monthly Quote
|
|---|---|
| Grange | $122 |
| Freedom | $206 |
| Safeco | $216 |
| Aspire Advantage | $223 |
| Bluefire | $230 |
Gap insurance
Is gap insurance needed for leased vehicles? The short answer is sometimes. If you total your car and owe more on the lease than it’s worth, gap insurance will help cover the difference between your loan amount and the actual cash value (ACV) of your vehicle.
You can typically purchase gap insurance from either your leasing company or your auto insurance provider.
Gap insurance usually costs more from a dealership than from an insurance company, so get quotes from a few insurance companies before accepting your lessor’s offer.
Is it more expensive to insure a leased car?
Yes, leasing car insurance is more expensive on average because lenders tend to require additional types of insurance and protection for the lease term.
However, the final cost of your auto insurance policy depends on a lot of factors. For instance, your lessor might require insurance with high coverage limits, making your policy more expensive — or you may qualify for lower rates based on your age, where you live, or your eligibility for car insurance discounts.
How to find cheap car insurance for leased cars
With so many types of coverage to buy, it may feel impossible to find affordable auto lease insurance. Fortunately, there are a few things you can do to lower your rates:
- Shop around: Before you settle on a provider, get quotes from at least three insurance companies. This is easy with Jerry — we gather personalized quotes from dozens of insurance companies to help you quickly find the best rate.
- Raise your deductible: The higher your deductible, the cheaper your monthly car insurance rates will be. However, leasing companies may set a maximum deductible, so be mindful of these requirements.
- Look for discounts: Most insurance providers offer discounts of one kind or another. The most common ones include discounts for good students, safe drivers, telematics, and home and auto insurance bundles. Contact your insurance agent to see if there are any discounts available to you.
FAQ
-
Is insurance required for a leased car?
-
What’s the difference between lease car insurance and owner car insurance?
-
Which insurance company has the cheapest leased car insurance?
-
Does Progressive offer gap insurance?
-
Is insurance cheaper on a lease?
-
Is there special insurance for leased vehicles?
Methodology
Data included in this analysis comes from policies that Jerry has quoted within the last 18 months. Jerry services 48 states and offers a range of insurance companies to choose from.
Megan Lee is an editor, writer, and SEO expert who specializes in insurance, personal finance, travel, and healthcare. She has been published in U.S. News & World Report, USA Today and elsewhere, and has spoken at conferences like that of NAFSA: Association of International Educators. Megan has built and directed remote content teams and editorial strategies for several websites, including NerdWallet. When she`s not crafting her next piece of content, Megan adventures around her Midwest home base where she likes to drink cortados, attend theme parties, ride her bike and cook Asian food.
Everett Cook is an award-winning journalist and editor with more than 10 years of experience across a variety of industries. In editing for Jerry, Everett’s mission is to help readers have a better understanding of the costs of owning or leasing a car and to better understand their vehicle in terms of insurance and repairs. Prior to joining Jerry, Everett was an editor for Axios. His previous work has been featured in The New York Times, The Los Angeles Times, The San Francisco Chronicle, The Atlantic, Atlantic Re:think, The Boston Globe, USA Today, and others. He’s also been a freelance writer and editor with experience in SEO, audience building, and long-term content roadmaps. Everett is a proud graduate of the University of Michigan.
