Yes — a leased car must be insured, and in most cases the lease contract will require full coverage (liability, collision, and comprehensive). Minimal liability-only insurance is rarely sufficient for a leased vehicle.

Why Leased Cars Usually Require Full Coverage

• When you lease a car, the leasing company retains ownership; the car serves as their collateral.

• Because you are not the owner, the leasing company needs protection against damage, theft, or total loss.

• Liability insurance alone covers damage you cause to others, but does not protect the leased vehicle itself.

• Therefore, leasing agreements almost always mandate collision (for accidents) and comprehensive (for theft, vandalism, weather damage, etc.) insurance — in addition to liability.

What Insurance Typically Covers on a Leased Car

A full insurance policy for a leased vehicle usually includes:

• Liability coverage — covers bodily injury or property damage you cause to others.

• Collision coverage — covers damage to the leased car from collisions, regardless of fault.

• Comprehensive coverage — covers theft, vandalism, fire, natural disasters, animal damage, and similar risks.

• Gap coverage (optional but often recommended) — covers the difference between what your standard insurance pays after total loss and what you still owe the leasing company.

Some lease agreements may explicitly require gap insurance — or at least strongly recommend it — because depreciation may leave you owing more than the car’s market value after a write-off.

What Happens If You Don’t Have Full Coverage on a Leased Car

If you try to lease a car with liability-only or minimal insurance, you may encounter:

• Lease rejection or invalidation by the leasing company.

• Risk that in an accident or theft, any damage or total loss would be your personal liability — you’d still owe the leasing company the remaining balance.

• Lack of protection in theft or vandalism — you bear all loss.

• Higher long-term costs than the savings from lower insurance premiums.

In short: trying to cut costs on insurance for a leased vehicle can lead to major financial risks.

How to Get Proper Insurance for a Leased Car

Step-by-Step Guide

1. Review your lease agreement — check insurance requirements.

2. Purchase a policy that includes liability, collision, and comprehensive coverage.

3. Consider gap insurance to avoid owing more than the car’s value.

4. Use the correct VIN and registered driver information when obtaining insurance.

5. Keep proof of insurance active at all times — most leasing companies will ask for proof before activating the lease.

Is Gap Insurance Always Required?

Not always — but it’s often very wise for leased cars because:

• Cars depreciate quickly; full insurance payout may be lower than what you owe.

• Gap insurance covers that “gap” so you don’t end up paying out of pocket after a total loss.

• Many leasing companies either require it or strongly advise it.

If your policy doesn’t include gap insurance, consider adding it for full protection.

FAQ — Insurance for a Leased Car

Can I insure a leased car with liability-only?
Almost never. Leasing companies generally require full insurance. Liability-only doesn’t protect the car itself.

What if my insurance doesn’t include collision or comprehensive?
Your lease may be invalid or denied. You must get collision and comprehensive before driving.

Is gap insurance mandatory for all leases?
Not always, but strongly recommended. Some leases require it explicitly; others recommend it to protect you financially.

Who pays for the insurance on a leased car?
You — as the lessee, you are responsible for maintaining required insurance for the duration of the lease.

What happens if I cancel the insurance while leasing?
You may violate the lease agreement, risk repossession, and become personally liable for total loss or damage.

Conclusion

Leased vehicles require full insurance coverage — liability, collision, and comprehensive — to satisfy the leasing company’s requirements and protect both you and the lessor. Skimping on insurance (e.g., liability-only) exposes you to heavy financial risk. Gap insurance is highly recommended to safeguard against depreciation or total loss scenarios. Always read your lease agreement carefully and get the right policy before you drive.

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