When buying a vehicle, your lender may require that you have
comprehensive auto insurance on it. This provides a safety net for the lender.
If the vehicle is a total loss, such as after a fire or a theft, the insurance
plan helps to cover the loss. When leasing a vehicle, you may have the same
requirements, or those that are similar. Those who lease a vehicle never fully
own it outright, making it even more important for you to maintain the most
appropriate and effective car insurance plan.
What Types of Auto
Insurance Must You Have?
When signing a lease for a vehicle, the company can outline
what your specific requirements may be. In most situations, you could be
required to maintain the following types of coverage:
insurance. This pays for damage resulting from incidents such as storm
damage, flooding, hail, fires, and theft.
insurance. This type of insurance helps to pay for damage to the vehicle
that occurs when you are involved in a collision that you caused, such as
backing into a pole or hitting another vehicle.
insurance. You may need to have at least the state required minimum
liability insurance. The lease holder here wants to ensure you are
operating the vehicle legally. Liability insurance offers no protection to
you or the lease holder, but to other drivers when you cause damage to
their person or vehicle.
Is that enough? It’s often advisable to have extended
liability insurance since most state-required levels are very low and often not
enough to pay for the damage resulting from a single incident. In addition to
this, you may also need to carry under-insured and uninsured plans, medical
payments, and coverage for any special equipment. You may also need gap
insurance. It is nearly always more affordable to purchase gap insurance, often
required by lease holders, from an insurance agency rather than buying it
directly from the leasing company.
The right amount and type of insurance coverage can save you
a great deal of money. And, it offers the protection you need to safeguard
against risks that could occur while you are operating your leased vehicle.
Ensure your policy meets all standards required under your lease agreement.
We’ll help keep you safe on the road. Call Insurance
Planning Service at (734) 421-9900 for more
information on Michigan