Guide to Car Insurance for Leased Cars
Nearly all leasing companies require car insurance when you lease a vehicle. And you’ll likely need coverage beyond the state-minimum liability limits — like comprehensive and collision.
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Written byKim Porter
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Co-authored the book “Future Millionaires’ Guidebook”
13 years writing personal finance content
A former chief copy editor at Bankrate and past managing editor at Macmillan, Kim specializes in writing easy-to-understand, actionable personal finance content.
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Edited bySarah Archambault
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Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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Updated November 20, 2024
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Table of contents
About 25% of all new vehicles in 2024 are leased, according to data from Experian’s State of the Automotive Finance Market Report. This type of arrangement, which essentially involves borrowing a car in exchange for making monthly payments, comes with several benefits. But leasing a car also requires you to follow specific insurance guidelines, like increasing your liability limits or having full coverage.
Comparing quotes to find the right insurance for your leased car is crucial for safeguarding your finances and the leasing company’s financial interests in the car.[1] If you plan to lease, here’s what you need to know.
Quick Facts
USAA, GEICO, and State Farm offer some of the lowest car insurance premiums for leased vehicles.
Leasing companies often require you to buy gap insurance.
Insuring a leased car might be more expensive than one you finance or own outright, but discounts and telematics programs may help you save money.
Best car insurance for leased vehicles
Though you may need to buy more insurance coverage with a leased vehicle, you can still save on car insurance. Here are some of the best car insurance companies for drivers who lease their cars.
USAA: Best for military families
| User Reviews | 4.9 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.4 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $45/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $99/mo |
4.9
Best choiceBased on 1602 verified guest reviews and ratings
How drivers feel about USAA
Drivers appreciate the ease of working with the carrier, competitive rates, and responsive service but dislike the price increases and lack of rideshare add-ons in some areas.
AI-generated from the text of verified reviews collected by Insurify
Best For
Members of the military community
Outstanding customer service
Competitive rates
How drivers feel about USAA
Drivers appreciate the ease of working with the carrier, competitive rates, and responsive service but dislike the price increases and lack of rideshare add-ons in some areas.
AI-generated from the text of verified reviews collected by Insurify
Best For
Members of the military community
Outstanding customer service
Competitive rates
Reviews (914)
Gloria
November 15, 2024
Verified Review
Not Good for Claims
I have storm damage and the claim process is not satisfactory.
Martin
November 11, 2024
Verified Review
Price Shopping
I have been with USAA for over 60 years. Obviously, I've been very happy. Since I don't drive very far, I have been seeing advertisements for lower prices. However, I have no plans of leaving USAA.
Rena Sabine
November 8, 2024
Verified Review
Disappointing and inflexible service
My experience with this company has been disappointing, especially this second time around. I would suggest considering other options. From my recent interactions, they have been dismissive and argumentative. I have already started finalizing my next premium with another company. I'm perplexed as to how they receive praise when they treat clients in this manner.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
880NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
1.35A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
USAA provides the lowest car insurance rates for leased cars. The company also consistently earns the highest scores for its customer service and rewards policyholders who have a history of good driving. USAA exclusively serves members of the military and their immediate families, so you’ll need to fit this criteria to buy a USAA policy.
Pros
Budget-friendly rates
Several available discounts
Some of the highest J.D. Power customer and claims satisfaction ratings
Cons
Available only to veterans, active-duty military members, and their family members
Doesn’t offer car replacement assistance on leased cars
Limited customer service hours
GEICO: Best for senior discounts
| User Reviews | 4.0 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.0 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $54/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $119/mo |
4.0
Best choiceBased on 10271 verified guest reviews and ratings
How drivers feel about GEICO
Drivers appreciate the excellent customer service and initial low prices but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Teen drivers
Cheap rates
Accident forgiveness
How drivers feel about GEICO
Drivers appreciate the excellent customer service and initial low prices but dislike the frequent price increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Teen drivers
Cheap rates
Accident forgiveness
Reviews (5,647)
James
November 19, 2024
Verified Review
Unsatisfactory Experience with Geico
Steer clear. They increase your rate at every renewal.
Edward
November 18, 2024
Verified Review
Experience with Geico
Reliable.
Chris
November 18, 2024
Verified Review
Poor
The customer service is below average and terrible.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
835NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.74A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
GEICO provides some of the lowest rates for leased cars and offers more discounts than nearly any other insurer. For example, seniors may qualify for a defensive driving discount or a five-year good driving discount. If you’re older than 50, you can apply for guaranteed policy renewal, ensuring the company can’t decline to cover you as you age.
Pros
Discounts for seniors
Good rates for drivers who lease their cars
Accident forgiveness available
Cons
Some drivers with violations may find better savings elsewhere
New-car replacement coverage not available
Gap insurance not available
State Farm: Best for telematics
| User Reviews | 4.2 |
|---|---|
| IQ Score The Insurify Quality (IQ) Score uses more than 15 criteria to objectively rate insurance companies on a one-to-ten scale. The Insurify editorial team researches insurer data to determine the final scores. | 9.3 /10 |
| Liability Only Liability-only insurance, sometimes called minimum-coverage insurance, pays for bodily injury and property damage to others in an accident the policyholder causes. It does not pay for the insured’s own damages. | $54/mo |
| Full Coverage Full-coverage car insurance generally includes liability, collision, and comprehensive coverage, and may include other optional coverages such as uninsured motorist coverage. Collision covers a policyholder’s repair or replacement costs in case of an accident. Comprehensive covers damages caused by non-accident events. The average quote displayed here reflects policies with the following coverage limits: $50,000 bodily injury liability per person; $100,000 bodily injury liability per accident; $50,00 property damage liability per accident; $1,000 collision deductible; and a $1,000 comprehensive deductible. | $119/mo |
4.2
Best choiceBased on 9036 verified guest reviews and ratings
How drivers feel about State Farm
Drivers appreciate the helpful local agents and initial service but dislike the high prices and frequent rate increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Customer service
Competitive rates
Discounts for safe drivers
How drivers feel about State Farm
Drivers appreciate the helpful local agents and initial service but dislike the high prices and frequent rate increases.
AI-generated from the text of verified reviews collected by Insurify
Best For
Customer service
Competitive rates
Discounts for safe drivers
Reviews (4,969)
Ronald
November 19, 2024
Verified Review
State Farm Experience: 35 Years+
They are forcing me to replace my house roof or they will cancel my policy.
David
November 19, 2024
Verified Review
Too expensive
It's too expensive. They raise rates every six months, even though I've never filed a claim.
Ronald
November 18, 2024
Verified Review
Very Expensive Auto and Home
Extremely harsh local service.
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
842NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.78A.M. Best
A.M. Best analyzes an insurer’s financials, operating performance, business profile, and other factors to generate an opinion-based rating of a company’s financial and credit strength. Ratings range from A++ (exceptional) to D (poor).
A++Why we picked this company
Most leasing companies restrict your annual mileage — so, if you’re interested in this type of arrangement, you may plan to drive less often. This makes you a good candidate for usage-based car insurance, which helps you save money based on how safely you drive.
State Farm promises that with its Drive Safe & Save program, you won’t get higher rates because of any negative driving behavior the device captures. The company says drivers can save up to 30%, which knocks $630 off their average premium each year.
Pros
Above-average J.D. Power customer satisfaction and claims ratings
Customers can save up to 30% using Drive Safe & Save
Several available discounts
Cons
Gap coverage not available
Accident forgiveness not available
Drivers with violations may find better savings elsewhere
The best car insurance companies for leased cars provide affordable rates for their drivers. They also offer excellent customer service, add-on options, and discounts to help further lower your premium.
Leased car insurance requirements
Leasing companies require you to carry car insurance to ensure someone will repair the car if it’s stolen or involved in an accident. The company’s requirements usually start with the state-mandated coverage. Every U.S. state except New Hampshire requires drivers to purchase a minimum amount of liability insurance, which covers damage to the other person’s vehicle and medical costs if you cause an accident.[2]
Beyond the state minimum, the company may require additional coverage, like collision and comprehensive insurance, along with higher liability coverage limits. Because insurance requirements and coverage limits vary by state and leasing company, you’ll need to do some research when comparing leasing options.
Find Insurance for a Leased Car
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How much coverage you need for a leased car
Determining how much coverage you need is a matter of checking the car insurance requirements in your state. Then, research leasing companies and what type of insurance they require. You’ll typically need to buy full coverage with higher liability limits, which protects you financially in the event of an incident. It also protects the leasing company’s financial interests in the car.
Some of the coverages you may need to buy include:
Uninsured motorist coverage
Uninsured motorist coverage pays for your car repairs and medical bills if someone driving without insurance injures you or your passengers or damages your car.
Personal injury protection coverage
PIP coverage pays for medical costs for you or your passengers when you’re involved in a car accident, regardless of who’s at fault.
Comprehensive and collision coverage
Comprehensive and collision coverages protect you after a covered loss, like a collision or theft.
Gap insurance for leased cars
Gap insurance covers the difference between what you owe on an auto loan and your insurance payout after a total loss. This type of policy is optional, though some leasing companies require customers to carry it.[3]
Cheapest leased car insurance
Leasing companies require auto insurance — typically full coverage. Prices can range widely, depending on the insurer and other factors.
For example, insuring a car through USAA costs $108 per month, on average. But you’ll need to be affiliated with the military to qualify. Liberty Mutual is more widely available, but rates average $216 per month — double what you might pay with USAA.
Here’s a closer look at some of the cheapest leased car insurance, based on Insurify data.
Insurance Company ▲▼ | Average Monthly Quote ▲▼ |
|---|---|
| USAA | $108 |
| State Farm | $124 |
| GEICO | $129 |
| Allstate | $150 |
| Progressive | $158 |
| American Family | $188 |
| Nationwide | $201 |
| Travelers | $214 |
| Liberty Mutual | $216 |
| Farmers | $269 |
| The General | $270 |
Disclaimer: Table data sourced from real-time quotes from Insurify's 50-plus partner insurance providers. Actual quotes may vary based on the policy buyer's unique driver profile.
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How to get cheaper leased car insurance
Factors like your age and gender, driving history, and your vehicle’s make and model can all influence the cost of your car insurance. But these tips can help you find the cheapest auto policies for your leased car:[4]
Increase your deductible
A deductible is the amount of money you pay out of pocket when filing a claim. Your car insurance covers the rest. Choosing a higher deductible can lower your monthly premiums, but make sure you can afford the deductible amount if you file a claim.
Bundle insurance policies
If you have an existing homeowners or renters insurance policy, you might save money by buying a car insurance policy with the same company. Most car insurance companies offer bundling discounts.
Check for discounts
Many insurance companies advertise discounts to help lower your premium. Look at potential discounts and determine which ones you’re eligible for to find the cheapest potential rates.
Shop around
Each car insurance company has a different way of setting rates, so one company may offer a better value. Get rate quotes from at least three companies before choosing a policy.
Leased car insurance FAQs
You may find this additional information helpful as you research insurance coverage options for your leased car.
Is leased car insurance the same as full coverage?
No. Leased car insurance refers to any car insurance policy you buy for your leased car. Full coverage is a policy that includes state-mandated minimum liability insurance along with extra coverages, such as collision and comprehensive.
Does leasing a car build your credit?
Yes. Leasing a car can help you build credit. The leasing company should report your lease agreement as a loan to the credit bureaus. Those agencies then add the loan information to your credit reports.
Payment history is an important part of your credit score. So, making on-time lease payments each month can help keep your credit strong.
What insurance is required for a car lease in Florida?
Florida requires drivers to carry at least $10,000 of personal injury protection (PIP) coverage and a minimum of $10,000 of property damage liability coverage. These requirements apply to all drivers who finance, lease, or own their vehicles. Drivers can also choose to buy additional insurance or raise their coverage limits.[5]
Do car leases include insurance?
No. Standard car leases don’t include car insurance. When you lease a car, you’ll need to research and buy insurance that meets your state’s and leasing company’s requirements.
Is leased car insurance more expensive than insurance for a car you own?
It’s possible. When you own a car outright, the law only requires you to buy the minimum coverage mandated in the state. When you finance a car, your lender usually requires you to buy full coverage. And for a leased car, you may need higher coverage limits, which increases the cost of the policy.
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Sources
- Insurance Information Institute. "Insuring a leased car."
- Insurance Information Institute. "Background on: Compulsory Auto/Uninsured Motorists."
- Insurance Information Institute. "What is gap insurance?."
- Insurance Information Institute. "How to save money on car insurance."
- Florida Department of Highway Safety and Motor Vehicles. "Florida Insurance Requirements."
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Kim Porter
Kim Porter is a writer and editor who's been creating personal finance content since 2010. Before transitioning to full-time freelance writing in 2018, Kim was the chief copy editor at Bankrate, a managing editor at Macmillan, and co-author of the personal finance book "Future Millionaires' Guidebook." Her work has appeared in AARP's print magazine and on sites such as U.S. News & World Report, Fortune, NextAdvisor, Credit Karma, and more. Kim loves to bake and exercise in her free time, and she plans to run a half marathon on each continent.
Edited bySarah Archambault
Experienced personal finance writer
Background working with banks and insurance companies
Sarah enjoys helping people find smarter ways to spend their money. She covers auto financing, banking, credit cards, credit health, insurance, and personal loans.
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