A Guide to Leased Car Insurance

Leasing a vehicle comes with a number of benefits you simply cannot get when financing or buying outright. From lower monthly payments to extended warranty coverage to the opportunity to upgrade to a newer model every few years, there is no shortage of reasons to consider leasing your next Toronto or Calgary ride. But if you're new to the world of auto leasing, you may have some questions, chief among them: "Is there separate insurance for leased cars, and do you need insurance to lease a car?" Let the Pfaff Leasing team give you the answers in this guide to leased car insurance.

Do You Need Insurance to Lease a Car?

Clearly, there are some notable distinctions between leasing and financing. But do you need insurance to lease a car, as you would when buying or financing one? Yes, Canadian law requires both buyers and lessees to carry minimum amounts of car insurance coverage. These amounts vary by province, but in Ontario, the minimum requirement is $200,000 in third-party liability, direct compensation for property damage, accident benefits, and uninsured motorist coverage.

Is There Separate Insurance for Leased Cars?

So, is there separate insurance for leased cars? No, there is not. With that said, in addition to the mandatory amounts required by law as outlined above, leasing companies almost always require lessees to carry additional coverages beyond liability. This is simply a way for both the lessor and the lessee to protect their respective investments in the vehicle.

Additional coverage obligations can vary by leasing company, but here are some common types of insurance lessees may need to purchase:

• Collision and comprehensive insurance, which are likely mandatory
• An increase in minimum liability coverage; for instance, a $1 million minimum instead of the $200,000 minimum stipulated by Canadian law
• GAP insurance, which helps pay the difference between the depreciated value of your leased vehicle and the remaining amount on the auto loan if your vehicle is stolen or irreparably damaged

Contact Us to Learn More About Leased Car Insurance

If you have any further questions about leased car insurance, feel free to contact us in Woodbridge. When you invest in the necessary insurance coverage, you will enjoy maximum peace of mind on the roads of Woodbridge and beyond.