So you are finally leasing your first car – a fresh start, a new car smell, and that “I get a brand-new ride every few years” kind of joy. You’ve got the latest features, zero commitment beyond the lease, and no worrying about resale value. But before you cruise into that bliss, let’s make sure your insurance is ready to roll, too. So, let’s figure out what Car insurance for leased vehicles you actually need.

When it comes to leasing, it’s not just about protecting yourself – it’s also about protecting the lender’s investment (aka, the car you technically don’t own). Here’s what most leasing companies require and what’s just smart to add on.

Leasing companies typically require you to carry liability coverage of at least $100,000 per person / $300,000 per accident for Bodily Injury and $100,000 for Property Damage.

Why the bump in limits? Because technically, you don’t own the car – they do. And they want to make sure that if you cause an accident, there’s enough insurance to protect their financial interest. A low-limit policy won’t cut it when you are dealing with medical bills or multiple vehicles in a crash.

Basically, the leasing company doesn’t want to end up in a legal or financial mess because the driver (you) carried only the bare minimum. And honestly? These limits are a smart move even if you are not leasing.

Tip: Always check your lease contract. Some leasing companies may even require $250K/$500K.

Collision pays for damage to your car if you hit another vehicle, pole, or any other object. Most leasing companies require a deductible no higher than $1,000.

Think of it this way: they want the car fixed quickly and correctly if something goes wrong.

This is your coverage for the “oops-I-didn’t-see-that-coming” scenarios: theft, vandalism, fire, hail, falling trees, and even deer-related collisions. Again, you most likely will be required to keep that deductible at or below $1,000.

Most leasing companies require that after-accident repairs use original manufacturer parts, not aftermarket substitutes. If this coverage is not included in your Auto insurance – you may end up paying the difference out of your own pocket. That means OEM coverage is a very much nice-to-have option added. This ensures that any repairs use the same parts your car was originally built with, keeping it up to factory standards and maintaining its value. No mismatched, off-brand pieces here.

Pays for medical bills for you and your passengers, regardless of who caused the accident. It’s usually affordable and can cover things your health insurance might not (like an ambulance ride or co-pays).

If your leased vehicle is in the shop after a covered claim (like an accident or a tree deciding to land on your hood), Rental Reimbursement helps pay for a temporary replacement car while yours is being repaired. Learn more about Rental Reimbursement coverage here.

It’s not automatic – you’ll need to add this optional coverage to your policy. And it’s worth it because without this coverage, you’d be stuck paying out of pocket – and we all know rental costs add up fast.

Important note: Leasing companies themselves don’t provide loaner cars. If your vehicle is under warranty, the dealership might offer one during certain repairs, but it’s not guaranteed. And if your vehicle is in the shop due to an accident, dealerships usually won’t help with a loaner unless you are footing the bill – or have this coverage in place.

Bonus: Most policies let you choose your daily limit and duration. So, if you’d rather not end up with a tiny compact car and no Bluetooth, take a moment to review those options before adding it on.

Flat tire? Dead battery? Locked your keys inside (again)? Some dealers include Roadside Assistance services in your lease, but if yours doesn’t, adding it through your insurer is a low-cost peace of mind.

This one is big. If your leased car gets totaled or stolen, GAP insurance covers the difference between what your insurance pays and what you still owe on the lease. Some leases may include this type of coverage, but you should always double-check. If not, you’ll want to add it through your insurance provider.

Real talk: Cars lose value fast. GAP coverage can save you thousands if things go sideways early in the lease.

Leasing a car comes with responsibilities – and insurance is a big one. Don’t assume your current coverage is enough. Make sure your policy checks all the leasing company’s boxes and gives you the protection you need to drive with confidence.

If you are unsure what’s required or what’s included in your lease, give us a call at Perfect California Insurance. We’ll help you build the right policy that keeps both your car and your budget protected.