What Kind of Insurance Do You Need for a Leased Vehicle?

Introduction: Why Insurance Is Critical for a Leased Vehicle

If you’re leasing a car in California, you’re required to carry specific types of insurance — and your lease contract likely spells out minimum requirements. Leasing companies protect their financial interest in the vehicle, so they often require more coverage than what the state legally mandates for drivers. This article explains what types of insurance you need for a leased vehicle, why each matters, and how eWay Insurance can help you get a policy that protects both you and the leasing company without overpaying.

What Insurance Is Required by Law in California?

California requires minimum liability coverage on all registered vehicles, leased or owned. These minimum coverage amounts are:

• $15,000 for injury or death of one person
  
  
• $30,000 for injury or death of more than one person
  
  
• $5,000 for property damage
  
  

These minimums cover liability, meaning they protect others if you’re at fault in an accident. But when you lease a vehicle, these minimums are rarely sufficient.

What Additional Coverage Do Leasing Companies Usually Require?

Leasing companies want assurance their vehicle is protected — and their requirements go beyond state minimums. Here are the most common coverages they require:

1. Higher Liability Limits

Leasing companies typically require higher liability limits than the state minimum, such as:

• $100,000 bodily injury per person
  
  
• $300,000 bodily injury per accident
  
  
• $50,000 property damage
  
  

These higher limits protect both you and the leasing company in a serious accident.

2. Collision Coverage

Collision coverage is almost always required on a leased vehicle. It pays for damage to your leased car if you hit another vehicle or object — regardless of who’s at fault. Without collision coverage, you would be responsible for repair or replacement costs, which could be extremely expensive on a newer leased vehicle.

3. Comprehensive Coverage

Comprehensive insurance protects your leased vehicle from damage that isn’t caused by a collision. Common examples include:

• Theft or vandalism
  
  
• Fire damage
  
  
• Weather events (hail, flood, wind)
  
  
• Falling objects or animal damage
  
  

Because leased vehicles are typically newer and have higher values, leasing companies want them protected against a wide range of loss scenarios.

4. Gap Insurance

One of the most important coverages for leased vehicles is gap insurance. Here’s why:

• If your leased vehicle is totaled, your regular insurance will pay only the vehicle’s actual cash value — which may be less than what you owe under the lease contract.
  
  
• Gap insurance covers the “gap” between what your standard insurance pays and what you still owe on the lease.
  
  

Many lease contracts include gap coverage or require you to purchase it. If it’s not automatic, you should add it — otherwise you risk paying the difference out of pocket.

Optional Coverages You Should Consider

While not always required, these optional protections can boost your peace of mind:

Rental Reimbursement

If your leased vehicle is in the shop after a covered loss, rental reimbursement helps pay for a temporary replacement car.

Roadside Assistance

This adds help for breakdowns, towing, lockouts, or flat tires.

Uninsured/Underinsured Motorist Coverage

This protects you if you’re in an accident with a driver who has little or no insurance.

What Happens If You Don’t Carry the Required Insurance?

Failing to maintain required insurance on a leased vehicle can lead to serious consequences:

• Lease violation: Your leasing company may charge penalties, add force‑placed insurance (often at a higher cost), or even repossess the vehicle.
  
  
• Out‑of‑pocket costs: Without collision, comprehensive, or gap coverage, you could be liable for thousands of dollars in repair or replacement costs.
  
  
• Financial exposure: If you cause an accident and lack adequate liability coverage, you may be responsible for medical bills and property damage up to your personal assets.
  
  

Insurance isn’t just a contract requirement — it’s a financial safety net.

How eWay Insurance Helps You Get Proper Coverage for a Lease

Selecting the right insurance for a leased car doesn’t have to be confusing or expensive. At eWay Insurance, we:

• Review your lease requirements and explain what coverages are mandatory
  
  
• Compare rates from multiple top carriers to help you find the best price
  
  
• Tailor insurance options — from higher liability limits to gap and optional protections
  
  
• Help you meet lease deadlines with proof of insurance delivered quickly
  
  
• Provide ongoing support if you need to adjust coverage over time
  
  

Whether you’re a first‑time lessee or renewing your lease, we’ll guide you step‑by‑step.

Frequently Asked Questions

1. Is gap insurance required on a leased vehicle?
Often yes. Many leasing companies require it because it protects both you and the lender if the vehicle is totaled.

2. Will my own car insurance cover a leased vehicle?
Yes — if your policy includes liability, collision, and comprehensive coverage, it typically extends to a leased vehicle. But always verify your limits meet lease requirements.

3. Can I use a separate policy instead of my personal auto insurance for a lease?
In most cases, your personal auto policy can cover a lease if it includes the required coverages. However, business leases or work‑related use might require commercial coverage.

4. What if I have a joint lease or multiple drivers?
Make sure all licensed drivers are listed on your policy. Unlisted drivers could be excluded from coverage.

5. How much extra will required coverages cost?
That depends on your driving record, vehicle type, location, and coverages selected. Working with eWay Insurance helps you balance cost with protection.

Final Thoughts

Leasing a vehicle in California means you need more than the state minimum car insurance. Higher liability limits, collision and comprehensive coverage, and gap insurance are typically required to satisfy your lease and protect your financial interests.

eWay Insurance helps you find the right coverage for your leased vehicle at a price that works for your budget. Get a personalized quote today so you’re protected and compliant with your lease requirements. 

Call (323) 749‑5400 or visit eWay Insurance to get started.