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Is Insurance Included When You Lease a Car?

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®

UPDATED: Mar 13, 2020

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car lease

Insurance Q&A: “Is insurance included when you lease a car?”

If the leasing company you’ve decided to go with is including car insurance as part of the lease agreement, don’t sign it!

Odds are the car insurance you’re being offered is simply an additional “convenience” option provided by the car leasing company.

It is the same convenience that leads to the purchase of a $6 gallon of milk from the local gas station.

Or how about the convenience of the $14 cheeseburger you’re eating at the airport while reading this post, or the $7.00 per gallon gas for the convenience of not having to re-fill the gas tank when returning your rental car?

[Rental Car Insurance]

Are you picking up on what we’re getting at here?

Insurance for a leased vehicle can already be more expensive than if you purchase the car outright, so it’s best to shop around.

Utilize Your Options

It is recommended you obtain insurance quotes online and/or visit a local independent insurance agent for multiple car insurance quotes PRIOR to finalizing the lease on your new ride.

This is the best way to ensure you get appropriate coverage for the most cost effective insurance premium.

Your agent can fax the proof of insurance over to the leasing company in real time and get you on your way, likely at half the cost of the leasing company’s insurance policy offerings.

Tip: Ask your insurance agent about their GAP coverage and new car replacement insurance options rather than purchasing that coverage from the leasing company.

It is also likely much cheaper than the same coverage offered by the leasing company.

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