My sister has a leased vehicle. I woul like to know what is the required minimum liability on that car. We live in Texas.

John

Houston TX

In Texas the minimum liability insurance is $25,000 for each injured person, up to a total of $50,000 per accident, and $25,000 for property damage. This basic coverage is referred to as 25/50/25.

Since your sister has a leased car she will be required to purchase more insurance than what the Texas requires. She may be required to get the physical damage coverage. Physical damage coverage consists of collision and comprehensive coverage. Usually, collision insurance covers damage to your car caused by collision with another car or object. Comprehensive insurance covers damage to your car from vandalism, theft or glass breakage. Most lien holders require physical damage coverage if you are leasing your car.

If your sister is leasing a car she will need to insure it. You may ask the lien holder to know if she is required to obtain the physical damage coverage of collision and comprehensive on the car.

I don’t own a car. What if I lease a car? Will I still need auto insurance?

Frances

Austin, TX

Leasing is fast catching up. A lot of people are into it. It is the advisable thing to do if you want lower monthly payments, a new car every couple of years and the benefits that go with a new car, like the latest safety features and high-tech automobile gadgets.

However, even if you don’t own a car and you go ahead and just lease one, you would still need to have auto insurance. It’s not legal to drive around the state of Texas without auto insurance coverage. You can not legally drive around Austin, TX, without insurance. Besides, the auto dealer or bank that will be financing the car lease will require you to have collision and comprehensive coverage. Collision insurance coverage takes care of the damages to your car if you collide with another car or object. Comprehensive insurance, on the other hand, pays for the damages to your vehicle caused by anything other than collision. This would include vandalism, natural disasters and even theft. You have to understand that when you lease, the car belongs to the company. They would want to make sure that their property will be properly covered and taken care of while you’re using it. You need to have these policies required by the car company and also liability insurance as this is required by the state.

Tags: auto insurance, car insurance, leased car insurance

My father and I just leased a vehicle. The problem is that I have a revoked drivers license and the dealership wants to exclude me and the auto insurance company will not exclude me. Can you tell me what to do?

Brian

Dallas TX

Most car insurance providers will not exclude you if the policy is under your name – meaning you are the named insured. The auto insurance policy will probably need to be in your father’s name – if they exclude you to the auto insurance policy. However, you will not going be covered to operate the automobile if you will be excluded to the car insurance policy. I suggest that you get your drivers license restored as soon as possible. Even though the dealership would want you to be excluded, you will have to verify with the car company to be certain it is ok for you to be excluded.

Does lease company pay for auto insurance of the leased automobile?

Amanda

Los Angeles CA

I do not think so. What I know is that you are still responsible obtaining car insurance on the leased car. It is true that the lease car company technically owns the vehicle but normally if you check the leasing documents not only you will be required to have the minimum liability insurance in your state but you will also be required the collision and comprehensive car insurance coverage.

If you fail to maintain the required car insurance on the vehicle that you are leasing and the car company finds out, what could happen is that they will take out forced auto insurance on the leased car and will be charged to you. I heard that it is more expensive that way.

When the car insurance company or the financial institute that owns the vehicle gets the “forced” auto insurance for you, the car insurance premiums will be costly than if you bought the leased car insurance yourself. This car insurance typically provides protection to lessor, not to you, for their interest in the automobile.