Updated: March 27, 2025
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Your coverage amount depends on where you live and the leaseholder's insurance requirements. Most states require minimum car insurance, but some may require additional coverage.
Leasing companies typically require gap insurance for depreciation. This type of insurance covers the gap between the car's value and how much you owe on the lease.
Leased car insurance typically costs more than insuring an owned vehicle. Travelers offers the cheapest policy at $89 per month.
Your car insurance needs depend on where you live and your leaseholder’s insurance requirements. Nearly all states require minimum car insurance, whether for owned, leased or financed cars. Some states also require additional coverages, such as uninsured and underinsured motorist coverage and personal injury protection.
In addition to state minimums, your lessor may require full coverage car insurance and/or gap insurance.
Coverage Type | State Requirements | Leaseholder Requirements |
|---|---|---|
✔ | ✔ | |
Uninsured/Underinsured motorist coverage | Varies per state | Varies per state |
Personal injury protection | In no-fault states | In no-fault states |
Collision insurance | ✘ | ✔ |
Comprehensive insurance | ✘ | ✔ |
Gap insurance | ✘ | Varies per leaseholder |
Insurance isn't included with leased or financed cars — you must arrange it yourself. If you don’t have coverage or if your coverage is insufficient, the leaseholder may purchase force-placed insurance for you. This is typically more expensive, so it's best to secure your own coverage to avoid extra costs.
If you're at fault in a collision, minimum coverage insurance covers the driver of the other vehicle. Most states require minimum coverage, including bodily injury and property damage. Leaseholders may also require higher policy limits than your state mandates.
Some states also require uninsured and underinsured motorist coverage. This policy protects you if you’re in an accident caused by an uninsured driver, a driver whose coverage can't cover your costs or a driver whose insurance company denies their claim.
PIP insurance helps cover medical expenses for you and your passengers following a car accident. It's required in some states and optional in others.
Collision insurance covers the repair or replacement of a leased vehicle if it's damaged in a collision with another car or object. This coverage is usually included in full coverage insurance.
Comprehensive insurance helps pay for repair or replacement if your car is damaged in an incident other than a crash. This coverage is usually purchased along with collision insurance as part of full coverage.
If your car is totaled in an accident or stolen, gap insurance may come in handy. It covers the difference between the amount you owe on the leased vehicle and its actual value.
Lessors often require gap insurance to cover the depreciation of a new car once it leaves the dealership. This insurance covers the gap between the car's value and what you owe on the lease, which is crucial if the car is totaled or stolen. Without it, you may still owe lease payments on a car you can't use.
Not all insurers offer gap insurance, so shop around for one that includes it with comprehensive and collision coverage. It's a smart choice, especially for higher-value leases. Payment options include monthly or an upfront lump sum.
Imagine you owe $25,000 on a lease. If the car is totaled, your regular insurance pays $20,000, but you owe $5,000 more. Gap insurance covers that $5,000, so you don't have to pay it out of pocket.
Insuring a leased car is often more expensive than insuring a purchased one due to higher coverage levels, higher policy limits and low maximum deductibles. Leaseholders typically require higher coverage and policy limits than state laws, including comprehensive and collision insurance, which increases premiums compared to basic coverage for an owned vehicle. A low maximum deductible in your lease agreement can also raise your rates.
The average cost of car insurance with comprehensive and collision coverage is $1,311 per year, while insurance that meets state requirements costs $898 — an annual difference of $413.
Lease agreements often set a cap on the deductible for your car insurance, impacting your monthly premiums. A lower deductible can mean higher premiums. This detail is usually specified in your lease contract.
The cheapest car insurance companies for leased cars are Travelers ($89 per month or $1,068 per year) and Nationwide ($90 per month or $1,084 per year). Use the table below to compare rates from various providers.
| Travelers | $1,068 | $89 |
| Nationwide | $1,084 | $90 |
| GEICO | $1,171 | $98 |
| State Farm | $1,219 | $102 |
| Progressive | $1,276 | $106 |
| Allstate | $1,424 | $119 |
| Farmers | $1,443 | $120 |
To avoid high insurance costs, research the insurance rates for the car model you're considering leasing before finalizing the lease. Factor in these premiums, along with the lease payments, to understand the total cost. Comparing quotes from multiple companies can help you get an accurate estimate. Use MoneyGeek's calculator below for quick, personalized quotes.
MoneyGeek's car insurance calculator will give you a customized estimate of your auto insurance cost. It's free to use, requires no personal information and we won't send you any spam.
Rates updated:
Mar 31, 2025
| Insurance Carrier | MoneyGeek Score | Average Monthly Payment | |
|---|---|---|---|
| 1 |  Capital Insurance Group | 94 /of 100 | $87 |
| 2 |  GEICO | 82 /of 100 | $109 |
| 3 | 83 /of 100 | $118 | |
| 4 | 83 /of 100 | $129 | |
| 5 | 79 /of 100 | $133 | |
| 6 | 77 /of 100 | $151 |
Get your real quotes from trusted insurance providers.
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When insuring a leased car, include the leasing company on the policy. If you file a claim, the payment check is issued to you and the leaseholder, and their endorsement is required to cash it. In some cases, the check may go directly to the leaseholder for repairs. Unlike with owned cars, any claim payout must be used solely for repairing the vehicle.
Even if your lessor has strict insurance requirements, you can still find ways to lower your policy costs. Here are some key steps you can take to help reduce your premiums:
Compare quotes from at least three insurers to find the best rate for the coverage you need. Use car insurance calculators to find the cheapest car insurance companies. Each provider rates drivers differently. Similar coverages from different insurers can result in very different rates.
Combine your auto insurance with other policies, like home and auto bundles, for more savings.
Opting for the highest possible deductible your lease agreement will allow can lower your premiums, but make sure you can afford it in case of a claim.
Safe drivers often qualify for lower rates through discounts.
A higher credit score can lead to lower insurance costs.
Look for car insurance discounts for anti-theft devices, defensive driving courses or low mileage.
Ensure you're not over-insured, considering the lease's coverage requirements.
Paying your premium in full annually, rather than monthly, can reduce costs.
Both leased and owned cars require insurance, with state minimums typically including liability and possibly uninsured motorist coverage or personal injury protection. Leasing companies often add their own requirements, such as comprehensive and collision insurance, and may recommend gap insurance to cover any value discrepancies. This article outlines the steps and requirements to insure a leased car, helping you navigate the process and ensure proper coverage.
We answer some common questions about leased car insurance requirements to help you get started:
Leased cars need full coverage car insurance, including comprehensive and collision, beyond state minimums. Lessors often require gap insurance, too.
You must have insurance to lease a car, as you won’t be able to drive without it.
The person leasing the car is responsible for paying the insurance premiums, even if the leasing company is listed on the policy.
No. Insuring a leased car usually costs more due to the higher coverage requirements set by leasing companies.
Shop around and compare quotes from multiple insurers. Look for discounts you qualify for and consider the highest possible deductible to lower premiums.
Study Overview
MoneyGeek evaluated car insurance rates using data from Quadrant Information Services and state insurance departments to emphasize the importance of comparing policies. Rates for the same driver profile can vary by insurer, so it's essential to shop around.
Data Sources and Depth
We gathered data from state insurance departments and Quadrant Information Services, reviewing 1,904 quotes from six companies across 100 ZIP codes.
Driver Profile
We based our average annual insurance cost analysis on the following driver profile:
We adjusted this profile by location, coverage type and coverage amount to determine average costs for various drivers across the U.S.
Coverage Levels and Deductibles Explained
With full coverage insurance, you must pay a deductible for collision and comprehensive coverage. Collision insurance covers damage from at-fault accidents, while comprehensive insurance covers damage from non-collision incidents like hail, fire or a fallen tree. Deductibles for each can be the same or different. You must pay the deductible before your insurance company covers the remaining repair or replacement costs.
Minimum coverage, which is part of full coverage, doesn't have a deductible. For our sample driver's full coverage policy, we used the following:
Learn more about MoneyGeek's methodology.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
