Leasing a brand-new vehicle has emerged as a popular choice for Alabama residents to enjoy a car with more features at an affordable price. Even though you don’t own the car or SUV, you’re still required to purchase insurance to drive it legally. Robinson Insurance Group LLC can help you understand your responsibilities regarding a leased vehicle when choosing an insurance policy.

Insurance Requirements Mandated by the State

Alabama mandates drivers to purchase a minimum amount of comprehensive, collision, and body liability insurance, regardless of whether they own or lease their vehicle. However, the company from which you lease the car may require you to purchase a higher amount of liability coverage. Ensure you know your lease provider’s requirements before shopping for an auto policy. The lessor may also require a specific deductible and gap insurance on your policy. Leased vehicles are generally more expensive and depreciate faster. These requirements often make a policy for a leased vehicle more costly. Consider adding gap insurance to your policy because if an accident totals your vehicle and you owe a significant amount on the lease, you could end up paying for the difference in cost between the value and the remaining lease amount.

Review the Lease Terms Before Purchasing Insurance

Terms differ among leasing companies, as does the coverage they may include in your lease payments. Some include gap insurance in your monthly lease payments, so reading the fine print can help you avoid paying for coverage you already have. Reading the fine print is also necessary to stay compliant with lease terms. Many companies require you to purchase full-coverage auto insurance when leasing one of their vehicles.

If you’re unsure about the difference between insurance requirements for a leased vehicle and one you own, Robinson Insurance Group LLC, serving Alabama residents, can assist. Contact us today to schedule an appointment.