What You Want to Know About Leased Vehicle Insurance

As a driver leasing a vehicle in Ontario, there are a few important things you need to know about leased vehicle insurance. Here are some key points:

1. Minimum insurance requirements: In Ontario, you are required by law to have a minimum level of insurance coverage if you lease a vehicle. This includes third-party liability coverage, accident benefits coverage, and uninsured automobile coverage.
2. Liability coverage: Third-party liability coverage is mandatory in Ontario and provides protection if you are found legally responsible for causing injury or damage to another person or their property. It covers claims up to a certain limit that you choose when you purchase your policy.
3. Accident benefits coverage: This type of coverage provides compensation for medical expenses, income replacement, and other expenses if you are injured in an accident, regardless of who was at fault.
4. Uninsured automobile coverage: This type of coverage provides protection if you are involved in an accident with an uninsured driver or in a hit-and-run situation.
5. Optional coverage: In addition to the mandatory coverage, you can choose to purchase additional optional coverage, such as collision coverage, comprehensive coverage, or increased liability limits.
6. Insurance costs: The cost of insurance for a leased vehicle will depend on a variety of factors, such as the make and model of the vehicle, your driving record, and the coverage options you choose. It’s important to shop around and compare quotes from different insurance providers to find the best coverage at the most affordable price.
7. Lease requirements: Your lease agreement may have additional insurance requirements that you need to meet, such as a certain level of liability coverage or a maximum deductible amount. Be sure to review your lease agreement carefully to understand these requirements.

Do You Pay Insurance on a Leased Vehicle?

Yes, if you lease a vehicle in Ontario, you are required by law to have insurance coverage on the vehicle. The insurance coverage requirements for a leased vehicle in Ontario are the same as for any other vehicle, which includes a minimum level of coverage for third-party liability, accident benefits, and uninsured automobile coverage.

As the lessee, you are responsible for obtaining and maintaining the required insurance coverage on the leased vehicle. The cost of the insurance coverage will typically be included in your monthly lease payments, and the leasing company may require you to provide proof of insurance on a regular basis.

Additionally, your lease agreement may have specific insurance requirements that you must meet, such as a certain level of liability coverage or a maximum deductible amount. Be sure to review your lease agreement carefully to understand these requirements and ensure that you have the appropriate insurance coverage in place.

How Much Does it Cost to Insure a Leased Car?

The cost of insurance for a leased car in Ontario can vary depending on a variety of factors, including the make and model of the vehicle, the level of coverage you choose, your driving record, and other personal factors.

However, as a general guideline, the cost of insurance for a leased car in Ontario can range from around $1,000 to $2,000 or more per year, depending on the level of coverage and other factors.

Shop around and compare quotes from different insurance providers to find the best coverage at the most affordable price. Additionally, some leasing companies may offer insurance packages as part of the lease agreement, so it’s worth checking with the leasing company to see if this is an option.

When considering the cost of insurance for a leased car, it’s important to factor in this cost as part of your overall monthly lease payment, along with other costs such as maintenance and repairs, fuel, and any applicable taxes or fees.

Is Insurance More on a Leased Car?

Generally, insurance for a leased car may be more expensive than insurance for an owned car in Ontario. This is because leased vehicles tend to have higher values and may require specific coverage requirements by the leasing company.

Additionally, leasing companies may require lessees to carry higher levels of insurance coverage, such as higher liability limits, which can increase the cost of insurance.

However, the actual cost of insurance for a leased car will depend on various factors, such as the make and model of the car, your driving history, your age, and the level of coverage you choose.

GAP Insurance

GAP insurance (Guaranteed Asset Protection insurance) is a type of insurance that covers the difference between the actual cash value of a vehicle and the amount owed on a lease or loan if the vehicle is stolen or totaled in an accident. In other words, it covers the “gap” between what you owe on the vehicle and what the vehicle is worth.

For example, if you owe $20,000 on a leased or financed vehicle and the vehicle is totaled in an accident or stolen, the insurance company will only pay the actual cash value of the vehicle, which may be less than what you owe. If the actual cash value is $18,000, you would still owe $2,000 on the vehicle. GAP insurance would cover the $2,000 “gap” between what you owe and what the insurance company pays.

GAP insurance is typically offered as an optional coverage when you purchase or lease a vehicle. The cost of GAP insurance can vary depending on factors such as the make and model of the vehicle, the value of the vehicle, and the length of the lease or loan.

Is it Cheaper to Insure a Leased Car?

It’s hard to say definitively whether it is cheaper to insure a leased car, as the cost of insurance can vary widely depending on a variety of factors, such as the make and model of the vehicle, your driving record, and the level of coverage you choose.

However, generally speaking, insurance for a leased car may be more expensive than insurance for an owned car due to a few factors. Leased vehicles tend to be newer and have higher values than older owned cars, which can increase the cost of insurance. Additionally, leasing companies may require lessees to carry higher levels of insurance coverage, such as higher liability limits, which can also increase the cost of insurance.

That being said, some insurance companies may offer discounts or other incentives for leased vehicles, so it’s important to shop around and compare quotes from different insurance providers to find the best coverage at the most affordable price.

What is the Best Coverage to Have for a Leased Vehicle?

The best coverage to have for a leased vehicle in Toronto, Canada, depends on a variety of factors, such as the value of the vehicle, your driving history, and your personal circumstances. However, as a general guideline, most leasing companies require lessees to carry a minimum level of insurance coverage, which includes:

1. Third-Party Liability Coverage: This type of coverage is mandatory in Ontario and provides protection if you are found legally responsible for causing injury or damage to another person or their property. The minimum requirement for third-party liability coverage in Ontario is $200,000.
2. Accident Benefits Coverage: This type of coverage provides compensation for medical expenses, income replacement, and other expenses if you are injured in an accident, regardless of who was at fault. The minimum requirement for accident benefits coverage in Ontario is $65,000.
3. Uninsured Automobile Coverage: This type of coverage provides protection if you are involved in an accident with an uninsured driver or in a hit-and-run situation. The minimum requirement for uninsured automobile coverage in Ontario is $200,000.

In addition to the mandatory coverage, you may also want to consider purchasing optional coverage, such as:

1. Collision Coverage: This type of coverage provides protection for damages to your vehicle in the event of a collision, regardless of who is at fault.
2. Comprehensive Coverage: This type of coverage provides protection for damages to your vehicle caused by non-collision events, such as theft, fire, or vandalism.
3. Increased Liability Limits: If you are concerned about potential lawsuits and want additional protection, you may want to consider increasing your liability limits beyond the minimum requirement.

The cost of insurance for a leased vehicle in Toronto can vary widely depending on a variety of factors, such as the make and model of the vehicle, your driving history, and the level of coverage you choose. As an example, for a sample driver with a clean driving record, insuring a 2021 Honda Civic leased vehicle with $1 million liability coverage, collision and comprehensive coverage, and a $1,000 deductible may cost around $2,000 to $2,500 per year. However, it’s important to note that the actual cost may be higher or lower depending on the specific circumstances. It’s recommended to obtain quotes from multiple insurance providers to compare costs and coverage options.