Yes, you are absolutely required to carry auto insurance on a leased car. In fact, the leasing company (the lessor) will mandate it. Since they legally own the vehicle, they have a significant financial interest in protecting it. You'll need to meet both your state's minimum liability requirements and the lessor's own, often more stringent, coverage specifications. These typically include high levels of liability, as well as comprehensive and collision coverage with a low deductible.
The leasing company will enforce this requirement through a clause in your contract. If you fail to maintain continuous coverage, they will often force-place insurance on the vehicle. This is a policy they take out on your behalf, but it is notoriously expensive and offers very basic protection, primarily shielding their asset, not you. A crucial type of coverage for a leased car is gap insurance. This covers the difference between the car's actual cash value and the amount you still owe on the lease if it's totaled in an accident. While sometimes included in the lease agreement, it's often an add-on you must purchase separately.
Here’s a quick look at how state minimum liability requirements can vary, though your lessor will likely require higher limits:
| State | Minimum Bodily Injury Liability (per person / per accident) | Minimum Property Damage Liability |
|---|
| Florida | $10,000 / $20,000 | $10,000 |
| California | $15,000 / $30,000 | $5,000 |
| New York | $25,000 / $50,000 | $10,000 |
| Texas | $30,000 / $60,000 | $25,000 |
| Alaska | $50,000 / $100,000 | $25,000 |
The best approach is to shop for your own insurance policy that meets or exceeds the lessor's requirements before you even sign the lease paperwork. This gives you control over the cost and the quality of your coverage.
