Ownership. A leased vehicle is owned by the leasing company. The owner of a vehicle is the responsible party for an at-fault auto accident. Because of this the leasing company usually requires that the insured maintain 100/300/50 liability insurance. (That is $100,000 if one person is injured, $300,000 if more than one person is injured, with a limit of $100,000 on any one person, and $50,000 for damage to any property, which property is usually the other car.) Be on the lookout for insurers that provide this coverage to only certain operators on your policy and not to all listed drivers. Best thing to do is to make sure that all drivers have the same coverage for all listed vehicles.
Gap Coverage. Usually, a minimal down payment is secured when leasing a vehicle. If the vehicle is involved in a total loss or stolen during the term of the lease, the value of the vehicle may be less than the amount due on the lease agreement. Many lease agreements include this “gap” coverage, however, it is also offered by your insurer and usually at a somewhat lower rate than the leasing company.
Mechanical Breakdown Coverage. This is usually not recommended for leased vehicles as the owner of the vehicle, the auto manufacturer, under warranty, is usually responsible for repairs beyond normal wear and tear. If you decide to purchase a vehicle that is coming off lease, purchasing a Mechanical Breakdown policy is a good choice. Mercury Insurance offers this coverage on new and used vehicles with a low deductible and coverage includes a substitute vehicle when a covered car undergoes repairs.