Car leasing with insurance: how much does it cost?

Insurance for a leased car is likely to be more expensive than insurance for a vehicle you own. This is because leasing companies tend to have stricter requirements for the types of coverage and coverage limits you need. So make sure you know how to save on car leasing with insurance.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: Apr 7, 2022

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What You Should Know

  • If you lease a car, you will need to meet car insurance requirements set by your state and your leasing company
  • Leasing companies typically require higher levels of coverage and more types of insurance to cover all losses, which can make your insurance significantly more expensive
  • To save money on car insurance, make sure you are taking advantage of every discount you qualify for and compare quotes from multiple companies before you buy a policy

If you consider leasing a car, you should understand what that means for your insurance. Leasing companies typically have stricter car insurance requirements than state requirements. You will likely have to buy more types of coverage with higher coverage limits.

Keep reading below to understand what types of coverage you need and how much it may cost when car leasing with insurance.

What insurance do I need for a leased car?

When you lease a car, you will be required to have car insurance before you drive the vehicle off the dealership lot. While state car insurance requirements will apply to your car, leased car insurance requirements may be stricter. Each leasing company will have its requirements for insurance, and more expensive vehicles may require higher coverage limits.

Let’s first take a look at car insurance requirements by state:

Minimum Legal Auto Insurance Requirements by State
StateMinimum BI & PD Liability LimitsRequired Insurance Policies
Alabama25/50/25BI + PD Liability
Alaska50/100/25BI + PD Liability
Arizona15/30/10BI + PD Liability
Arkansas25/50/25BI + PD Liability, PIP
California15/30/5BI + PD Liability
Colorado25/50/15BI + PD Liability
Connecticut25/50/20BI + PD Liability, UM, UIM
Delaware25/50/10BI + PD Liability, PIP
District of Columbia25/50/10BI + PD Liability, UM
Florida10/20/10BI + PD Liability, PIP
Georgia25/50/25BI + PD Liability
Hawaii20/40/10BI + PD Liability, PIP
Idaho25/50/15BI + PD Liability
Illinois25/50/20BI + PD Liability, UM, UIM
Indiana25/50/25BI + PD Liability
Iowa20/40/15BI + PD Liability
Kansas25/50/25BI + PD Liability, PIP
Kentucky25/50/25BI + PD Liability, PIP, UM, UIM
Louisiana15/30/25BI + PD Liability
Maine50/100/25BI + PD Liability, UM, UIM, Medpay
Maryland30/60/15BI + PD Liability, PIP, UM, UIM
Massachusetts20/40/5BI + PD Liability, PIP
Michigan20/40/10BI + PD Liability, PIP
Minnesota30/60/10BI + PD Liability, PIP, UM, UIM
Mississippi25/50/25BI + PD Liability
Missouri25/50/25BI + PD Liability, UM
Montana25/50/20BI + PD Liability
Nebraska25/50/25BI + PD Liability, UM, UIM
Nevada25/50/20BI + PD Liability
New Hampshire25/50/25Financial Responsibility only
New Jersey15/30/5BI + PD Liability, PIP, UM, UIM
New Mexico25/50/10BI + PD Liability
New York25/50/10BI + PD Liability, PIP, UM, UIM
North Carolina30/60/25BI + PD Liability, UM, UIM
North Dakota25/50/25BI + PD Liability, PIP, UM, UIM
Ohio25/50/25BI + PD Liability
Oklahoma25/50/25BI + PD Liability
Oregon25/50/20BI + PD Liability, PIP, UM, UIM
Pennsylvania15/30/5BI + PD Liability, PIP
Rhode Island25/50/25BI + PD Liability
South Carolina25/50/25BI + PD Liability, UM, UIM
South Dakota25/50/25BI + PD Liability, UM, UIM
Tennessee25/50/15BI + PD Liability
Texas30/60/25BI + PD Liability, PIP
Utah25/65/15BI + PD Liability, PIP
Vermont25/50/10BI & PD Liab, UM, UIM
Virginia25/50/20BI + PD Liability, UM, UIM
Washington25/50/10BI + PD Liability
West Virginia25/50/25BI + PD Liability, UM, UIM
Wisconsin25/50/10BI + PD Liability, UM, Medpay
Wyoming25/50/20BI + PD Liability
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In addition to the above insurance requirements, leasing companies typically require higher liability limits and other insurance types that offer broader coverage. For example, lenders and leasing companies commonly require collision and comprehensive coverage. 

While liability coverage and many other state requirements are mainly used to pay for other people’s injuries and damage, collision and comprehensive coverage pays for damage to your vehicle, which helps protect the leasing company in an accident or other loss.

Finally, your leasing company may also require GAP insurance, which will pay what you owe on your lease if the car is totaled.

Regardless of which kind of insurance you must have, leasing companies also require that the driver list the company as a loss payee on the insurance policy, which means that the leasing company receives the insurance payouts after a claim is filed.

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How much does car insurance for leased cars cost?

Is insurance more expensive for a leased car?

Yes, car insurance is typically more costly for a leased car than for a vehicle you own because leasing companies require that you carry more coverage.

Let’s look at the average rates for the types of insurance you will likely need for your leased car. Here are the average rates for liability, collision, comprehensive, and full coverage:

Average Annual Auto Insurance Rates by Coverage Type
StatesAverage Annual Comprehensive Insurance RatesAverage Annual Collision Insurance RatesAverage Annual Liability Insurance RatesAverage Annual Full Coverage Insurance Rates
Alabama$156.31$317.96$372.57$868.48
Alaska$137.26$350.81$547.34$1,027.75
Arizona$186.12$277.96$488.59$972.85
Arkansas$190.41$321.80$381.14$906.34
California$100.54$396.55$462.95$986.75
Colorado$174.61$287.00$477.10$981.64
Connecticut$131.62$368.51$633.95$1,151.07
Delaware$122.49$318.77$776.50$1,240.57
District of Columbia$233.24$468.67$628.09$1,330.73
Florida$159.18$331.83$845.05$1,048.40
Georgia$101.56$313.17$490.64$873.28
Hawaii$116.55$219.05$458.49$679.89
Idaho$128.13$309.71$337.17$884.56
Illinois$122.06$250.29$430.54$755.03
Indiana$183.53$219.75$372.44$702.46
Iowa$267.91$263.33$293.34$862.93
Kansas$141.39$267.91$342.33$938.51
Kentucky$215.17$414.36$518.91$1,405.36
Louisiana$104.98$259.98$727.15$703.82
Maine$152.72$353.99$333.92$1,116.45
Maryland$134.96$388.28$599.48$1,129.29
Massachusetts$154.85$413.83$587.75$1,364.00
Michigan$184.27$234.40$722.04$875.49
Minnesota$210.33$323.22$439.58$994.05
Mississippi$181.27$275.28$437.38$872.43
Missouri$211.91$265.32$399.41$863.52
Montana$229.25$237.13$387.77$831.02
Nebraska$117.63$303.86$349.07$1,103.05
Nevada$110.77$307.42$647.07$818.75
New Hampshire$131.35$381.86$393.24$1,382.79
New Jersey$172.57$276.98$865.55$937.59
New Mexico$171.12$385.02$462.21$1,360.66
New York$136.08$293.59$784.98$789.09
North Carolina$231.04$244.09$357.59$773.30
North Dakota$121.61$269.84$282.55$788.56
Ohio$225.84$318.47$376.16$1,005.32
Oklahoma$93.87$226.83$441.57$904.83
Oregon$144.21$327.24$553.43$970.51
Pennsylvania$132.19$411.51$495.02$1,303.50
Rhode Island$180.94$265.07$720.06$973.10
South Carolina$258.11$208.58$497.50$766.91
South Dakota$116.53$282.96$289.04$1,257.13
Tennessee$148.45$309.07$397.73$871.43
Texas$206.42$374.49$498.44$1,109.66
Utah$109.50$265.90$471.26$872.93
Vermont$125.48$295.42$340.98$764.02
Virginia$136.54$280.52$413.12$842.67
Washington$106.38$265.74$568.92$968.80
West Virginia$204.28$329.67$501.44$1,025.78
Wisconsin$136.81$226.00$359.84$737.18
Wyoming$247.57$278.83$323.38$847.44
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In addition, you may expect to pay more for GAP insurance. For example, GAP insurance could cost between $400 and $700 when you purchase it from a dealership or between $20 and $40 per year when you add it to your car insurance policy.

How can I save money on car insurance?

Since the cost of your car lease, including insurance, can be a little overwhelming, let’s look at ways to lower your auto insurance rates.

One of the best ways to save on your car insurance is to take advantage of car insurance discounts. Many companies offer various discounts, and an insurance agent may be able to help you find a company that provides the best discounts for you.

Below is a list of the discounts available at some of the most popular insurance companies:

Auto Insurance Discounts Available by Company
Discounts21st Century Discounts OfferedAAA Discounts OfferedAllstate Discounts OfferedAmerican Family Discounts OfferedAmeriprise Discounts OfferedAmica Discounts OfferedCountry Financial Discounts OfferedEsurance Discounts OfferedFarmers Discounts OfferedGeico Discounts OfferedLiberty Mutual Discounts OfferedMetLife Discounts OfferedNationwide Discounts OfferedProgressive Discounts Offered
Adaptive Cruise Control
Adaptive Headlights
Anti-lock Brakes
Anti-Theft
Claim Free
Continuous Coverage
Daytime Running Lights
Defensive Driver
Distant Student
Driver's Ed
Driving Device/App
Early Signing
Electronic Stability Control
Emergency Deployment
Engaged Couple
Family Legacy
Family Plan
Farm Vehicle
Fast 5
Federal Employee
Forward Collision Warning
Full Payment
Further Education
Garaging/Storing
Good Credit
Good Student
Green Vehicle
Homeowner
Lane Departure Warning
Life Insurance
Low Mileage
Loyalty
Married
Membership/Group
Military
Military Garaging
Multiple Drivers
Multiple Policies
Multiple Vehicles
New Address
New Customer/New Plan
New Graduate
Newer Vehicle
Newly Licensed
Newlyweds
Non-Smoker/Non-Drinker
Occasional Operator
Occupation
On Time Payments
Online Shopper
Paperless Documents
Paperless/Auto Billing
Passive Restraint
Recent Retirees
Renter
Roadside Assistance
Safe Driver
Seat Belt Use
Senior Driver
Stable Residence
Students & Alumni
Switching Provider
Utility Vehicle
Vehicle Recovery
VIN Etching
Volunteer
Young Driver
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While discounts may help you save some money, you should also do your best to drive safely. If you already drive safely, you may want to consider using an app that gives discounts for safe driving behaviors.

With that being said, saving money starts with getting quotes. For example, when shopping for car insurance, you should get quotes from multiple companies to find out which company can get you the best deal for your leased car.

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