A lease changes who decides the cover
Leased car insurance — also searched as car lease insurance and insurance on leased cars — is different because you do not own the car. The leasing company does, and the lease agreement sets minimum cover you must carry for the whole lease term. State minimum cover is usually not enough: the lease typically requires collision and comprehensive cover, liability limits above the state minimum, and gap cover. Failing to carry the required cover can breach the lease, not just leave you underinsured.
Gap cover, in plain terms
Gap cover bridges the difference between what the car is worth at the time of a total loss and what you still owe on the lease. A new car loses value quickly, so early in a lease the amount owed can be well above the car's value; without gap cover, that difference is yours to pay after the insurer settles the car's value. Some leases include gap cover, some sell it separately, and some require you to buy it — read the lease to find out which applies before you sign, and do not assume it is included. The gap insurance guide beside this page explains the arithmetic in full.
Liability limits and deductibles under a lease
Leases commonly require liability limits well above the state minimum — often expressed as a combined figure per accident — and a maximum deductible for collision and comprehensive, so the leasing company is not exposed to a large unpaid deductible. If you raise a deductible to lower a premium, check the lease cap first: a deductible above the cap breaches the lease even if the policy itself is valid. The same applies to dropping collision or comprehensive: the lease usually forbids it for the whole term.
At the end of the lease
Cover questions do not end when you hand the car back. Excess wear, mileage over the allowance and damage found at inspection can lead to charges, and the lease sets out how those are assessed. Photograph the car at handover, keep the inspection report, and keep your cover in force until the leasing company confirms the car is accepted back — a gap in cover between handover and acceptance is a risk worth avoiding.
Common questions
Does the leasing company arrange the insurance?
Usually not. You arrange it, and the leasing company is named as an interested party so it is told if cover lapses or changes. You remain responsible for keeping it in force.
Is gap cover always required?
Often, but not always in the same form: it may be included in the lease, bought separately, or required as a condition. The lease document itself is the source of truth for your agreement.
Can I lower my premium by raising the deductible?
Only up to the lease's deductible cap. Above that cap you breach the lease, even if the insurer accepts the higher deductible.