Car insurance is used to safeguard fellow road users if you cause damage to their vehicle or property. Depending on the extent of your coverage, it can also provide protection for your own vehicle in case of theft, break-in, or an accident.
There are three primary categories of vehicle insurance coverage:
Third Party: This is the essential legal coverage required for driving, encompassing only damages inflicted upon others or their property.
Third Party, Fire and Theft: This includes additional coverage in the event of theft or fire damage to the vehicle.
Comprehensive: This is the broadest level of coverage available. It encompasses third-party, fire, and theft protection. Additionally, if you are at fault in an accident, you can claim the expenses for repairing your own vehicle, as well as any damage caused to others or their property.
What insurance is required for a leased car?
Leasing companies typically mandate a comprehensive insurance policy for leased vehicles. This is because they retain legal ownership throughout the lease term and need comprehensive coverage to safeguard the asset.
Opting for a comprehensive insurance policy not only ensures protection against damages to other vehicles but also to your leased car. Here's a brief overview of what a comprehensive policy covers:
Most comprehensive policies also encompass additional benefits like:
However, it's essential to review the specifics of what your policy includes, as coverage can vary significantly among insurers. While comprehensive insurance might come at a slightly higher cost compared to third-party policies, it's the optimal choice for all parties involved. This type of coverage ensures that in case of an accident, you won't face substantial bills. You'll only be responsible for the excess, regardless of the repair expenses.
Who should hold the insurance policy?
For personal lease agreements, the primary policyholder on the insurance certificate should be the individual who initiated the lease (referred to as the hirer). In the case of a business lease, the primary policyholder should be the company itself or a company director. Subsequently, the company needs to provide a letter to authorise employees permitted to operate the leased vehicle.
To find the best insurance policy for your leased vehicle, we recommend using Compare the Market.
FLEXXiLease is the UK’s leading short term car leasing company offering fast nationwide delivery for a large selection of vehicles. Contact us to get started with a short-term lease.