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2 Recommended Auto Coverage For Your Leased Vehicles
Since insuring leased cars involved a great amount of risk due to unexpected occurrence
within the leasing period, here are some of the recommended insurance coverage that offer considerable protection namely: Guaranteed Auto Protection (GAP) and Physical damage coverage (Comp and Coll).Leased vehicles are assets paid or rented for the services delivered. This is preferred by many clients since they can simply return the old vehicles after several months to years and replace it with a new unit without being obliged to sell the used model. In most cases where car is under leased, the company is required to avail the following types of insurance as means of protection namely:
Guaranteed Auto Protection (GAP)
This type of car insurance covers the difference between the amount owed to the leasing company and the appraised value of the car at a particular time. It is intended to protect the policy holder from paying the short-changed between the compensation and financing. GAP insurance is best recommended for the following instances: leased vehicles, high interest rate, long-term loan payments, low down payment, vandalism incident, theft coverage, and depreciating car worth. However, most of the insurers will oblige the policy holder to purchase comprehensive and collision coverage prior to granting GAP insurance.
Physical damage coverage (Comp and Coll)
Just like any other vehicle under financing, leased cars are required to have physical damage coverage along with GAP insurance. However, there are two types of PD namely the comprehensive and the collision coverage. To differentiate, below are the definitions and their major distinctions:
Comprehensive
This is a comprehensive protection for your vehicles that acquire damage caused by any unfavorable incidents except collision, which may come in the form of theft, fire, vandalism, flood, and the likes. Those under financing can benefit a lot from this type of policy because whatever happens to your vehicle within the period of lease will be covered regardless of the amount you have contributed. However, the value varies depending on the amount of your chosen deductible.
Collision
In the event that accidents happen due to collision, the claims will help you pay for the repairs or replacement of new vehicles. The policy does not give detailed specification as to who is at fault. However, accidents involving with both moving and stationary object are acceptable. It is an exclusive coverage of the insured involving his personal vehicle without an extended coverage to any other vehicles involved in the accident. No medical expenses will be provided to the driver and passengers when the incident happened.
Since these types of coverage are pricey, yet all-inclusive, consider asking quotes from at least three different insurers for comparison. Choosing the best coverage will save you lots of fortune especially in times of mishap.
by: Jacob Schiffer