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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Kim Porter
Written byKim Porter
Kim Porter
Kim Porter
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  • 13 years writing personal finance content

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Sarah Archambault
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Updated November 7, 2024

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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.
$46/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.
$100/mo
4.9
Best choiceBased on 1597 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 (911)

Tom

November 7, 2024

Verified Review

A Large Company Managed Inefficiently

I would recommend considering other options. My experience with them was not positive, even after being a customer for over 50 years.

Martin

November 6, 2024

Verified Review

Sharing My Experience with You

I have been with USA for more than 60 years. I am very happy with them. I had my car and my home insured for all of that time. I drive very little anymore, certainly well under 50 miles a day. I see ads for much lower rates and I was just looking to see if there are lower rates out there and if USA would give me a lower rate. I have no plans to change my insurance.

Richard

November 5, 2024

Verified Review

Excellent

Excellent experience with no problems.
See all USAA reviews
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
880
NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
1.35
A.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.
$55/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.
$121/mo
4.0
Best choiceBased on 10252 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 (5,635)

Elizabeth

November 7, 2024

Verified Review

Average Car Insurance

GEICO can raise premiums without prior consent.

Robert

November 7, 2024

Verified Review

Geico Insurance

Their rates just seem to be getting too high compared to other companies.

Samuel

November 6, 2024

Verified Review

Ripoff

It's cheaper than your quotes.
See all GEICO reviews
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
835
NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.74
A.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.
$55/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.
$121/mo
4.2
Best choiceBased on 9003 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 (4,952)

Bonnie

November 7, 2024

Verified Review

Solid Offering

Great agent.

Fred

November 7, 2024

Verified Review

Unfair Treatment by State Farm

I have been with them for over 5 years. In the last few years, they have been overcharging me, claiming that I underpaid. I was dealing with liver cancer during this time, which made the situation even more challenging. My truck broke down, and after paying for a whole month, they only refunded me $20 when I took it off the policy. That was disappointing. I inquired about a discount for being 65 years old, but was told they don't offer that. In fact, they might even charge more. Meanwhile, other companies offer senior discounts. For a long time, I was paying over $600 a month.

Dianne

November 7, 2024

Verified Review

A Royal Rip-Off

I had State Farm for over 50 years. I had one back-up accident which caused a dent in my fender. The damage to the parked car didn't seem significant, but I don't know the exact extent as they won't disclose it to me. I now suspect the damage was exaggerated. My insurance went from $79.00 per month to $119.00 per month. This rate includes both house insurance and coverage for my 2009 Scion. This was the only accident in all that time, and I didn't even get my car fixed! Over 30 years ago, my car was broken into at a movie theater and I claimed money for stolen jackets, CDs, and a blanket. If you ever need to use your insurance, they increase your rate unfairly. They collected premiums from me all those years without a claim, and when I finally needed it, they increased my rate. This is why so many people don't file claims when they could and should. It feels like a royal rip-off.
See all State Farm reviews
JD Power
J.D. Power data measures overall customer satisfaction and claims satisfaction based on a 1,000-point scale.
842
NAIC Index
Average amount of customer complaints relative to competitors on a 0-5 scale. A lower score represents fewer complaints.
0.78
A.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.

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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:

  • illustration card https://a.storyblok.com/f/162273/x/5285c4cd74/uninsured-or-underinsured-motorist-coverage.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/150x150/c09380c3c0/car-dashboard-96x96-orange_045-airbag.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/x/665da91bf7/comprehensive-coverage.svg

    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]

  • illustration card https://a.storyblok.com/f/162273/150x150/f93e5c7ccc/banking-96x96-orange_017-coins.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/x/f9e1d7766e/saving-bundle.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/150x150/75872bbafd/money-96x96-green_033-magnifying-glass.svg

    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.

  • illustration card https://a.storyblok.com/f/162273/150x150/8329623678/money-96x96-blue_025-online-money.svg

    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.

Sources

  1. Insurance Information Institute. "Insuring a leased car."
  2. Insurance Information Institute. "Background on: Compulsory Auto/Uninsured Motorists."
  3. Insurance Information Institute. "What is gap insurance?."
  4. Insurance Information Institute. "How to save money on car insurance."
  5. Florida Department of Highway Safety and Motor Vehicles. "Florida Insurance Requirements."
Kim Porter
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.

Sarah Archambault
Sarah 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.

Featured in

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