Leasing a car is not as simple as it seems, particularly when it comes to car insurance requirements. There are several types of car insurance quotes available, depending on the carrier you choose for insurance and the state that you live in. One of the most important facts about leasing a car that individuals often forget is that it is a lease, with requirements and various terms and conditions set forth by the company that owns the vehicle.
Therefore, the car is not necessarily yours to do what you will with it. The lease is a legally-binding obligation between you and the dealership. This means you have an obligation to maintain the vehicle in top-notch condition, as well as fully reimbursing the dealership and/or finance company for any damages that might occur to it while it is in your possession. So how would this affect your insurance policy?
Car Insurance Types
Most people know and understand that car insurance policies are designed to meet state and federal regulations to ensure that the driver of the vehicle, other drivers on the road, and property owners are protected in the event of an accident. Auto accidents are not just a “what-if” scenario – they happen daily.
Some states allow “liability only” insurance coverage. This type of policy is great for people who own their own vehicle and can afford to fix any damages that might occur to it or choose not to do so with no legal obligation to anyone else to repair or replace the vehicle or parts if they are damaged.
While insurance policies differ, most comprehensive policies will cover the repair of damages, or reimburse the driver fully for the current blue book value of the vehicle if it has been deemed by the car insurance carrier to be “totaled”. Some policies even provide “gap insurance” for drivers who have financed their vehicle and owe more to the finance company than what the vehicle is worth.
Be Prepared
When making the decision to lease rather than purchase, it is important for you as a consumer to get the facts from both the dealership and your insurance carrier. Discuss the terms of your lease before signing on the dotted line – ask the dealership what kind of insurance coverage you are required to have.
Verify the information with any second or third parties involved. Lastly, check several car insurance companies in your state to compare pricing and coverage – not all policies are created equal and there may be some items not covered on one policy that are covered under another policy.
Doing your research ahead of time will help prevent some of the hassles that can come with leasing and purchasing car insurance.
Source: Jersey Car Cash – How to sell my car for cash in New Jersey.
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