Why is the cost of insurance so much higher for a leased vehicle?
A. This is a common misunderstanding. The cost of your vehicle insurance is not greater because your vehicle is leased. The lessor will be listed on your insurance policy as additional insured and the loss payee. There is no charge to you for this provision. The cost of your vehicle insurance is impacted by the coverages you are required to purchase when you lease or finance a vehicle. All lien holders, lessors, and funders require that you maintain full physical damage coverage that is coverages for any damage the vehicle may sustain in an accident and for the theft of the vehicle. Often leasing companies will also require you to carry limits of coverage on the liability portion of your policy in excess of state minimum. In most states, raising the limits of liability increases the cost of your insurance only slightly. The big component of insurance cost is the cost of collision and comprehensive coverage. You would have purchased this insurance under any circumstances with the purcha
