A leased vehicle must hold collision insurance on it at all times.
When you charter a vehicle, you are essentially renting the vehicle from the bank. You are chargeable for succeeding all Business agreement details, such as interest collision insurance on your vehicle at all times. As the owner of the vehicle, the bank can take out an insurance policy on the car. This is often very expensive---much higher than you would normally pay and in excess of $1,000 in difference between your policy payment and the banks. The bank is in its legal right to take the vehicle from you if you do not maintain adequate insurance coverage. If changing companies, make sure you provide your leasing institution with proof of your new policy coverage.
You are extremely required to appropriateness your collision coverage in the act of entity damage to your automobile before your sublet confine and turn in. Provided you cook not locate your damage, the leasing association will---you are financially bonded for the reward the bank incurs for repairs. Your insurance policy erudition must dossier the leasing partnership as the loss-payee. As of Jun, 2010, LeaseGuide states that most leasing companies thirst for at least the succeeding coverage for policy minimums: $100,000 per adult and $300,000 per circumstance for liability insurance, $50,000 minimum for Belongings liability coverage. Check with your bank to confirm.
Deductibles and Gap Insurance
Deductible limits differ by leasing company. Although your insurance company may allow you to have as much as a $1,000 deductible, you are required to keep the deductible at $500 or lower. The leasing bank requires a low deductible because it is unlikely a person can easily make a high deductible payment in the event of a major accident. Keeping your deductible low is also beneficial to you---the last thing you'll want to worry about after a major accident is coming up with $1,000 for damages, especially if you're unable to work. Consider Gap insurance if this is not included in your lease contract by the bank. You may have to purchase Gap insurance separately from your leasing institution or from an independent provider. If your vehicle becomes a total loss, your Gap insurance covers the time between remaining payments are due to your bank and what the vehicle is actually worth in a loss to your insurance company. This gap can be thousands of dollars.
Penalties
Expect penalty charges if you do not maintain the required collision coverage. Research with your bank before changing policies after your lease is in place---you can suffer financial penalties provided your policy coverages are incorrect.
