Auto Insurance for Your Leased Car

You have leased a car, but how do you insure it? It might be easier to stick with the same insurance company that you use for the car you own, but it may not always be the most cost effective choice for your coverage. Sometimes it may be best to look at other companies and see if you can find lower rates.

Leased cars are a little different from cars you personally own. A leased vehicle still belongs to the leasing company. They want to make sure their car will be covered in the case of damaged, totaled or stolen. Usually, coverage is required to pay for the difference between what your insurance company pays and the balance on your leased vehicle at the time of the accident or damage. The insurance coverage that covers this difference is called GAP Insurance, Guaranteed Auto Protection, and covers any remaining amount between what the insurance covers and what remains on the balance of the car. If your leasing company is BMW Financial Services, Chrysler Financial or any other finance division of an automaker, then it is possible your GAP insurance will be offered by the same lease company.   

However, you have no obligation to accept the GAP insurance that is included in your lease agreement. By shopping around with different insurance companies, you may find equal coverage for a cheaper rate. Invest some time by shopping around between different insurance companies, including the insurance company you have used for cars you own.  But, always be sure that your leased vehicle is completely covered in case of an accident. The best coverage is the one that fully covers you.

If you have questions about insurance for your leased vehicle and Los Angeles car insurance, visit the website of True Rate Insurance or call us at 855-735-1600. When you are looking for something as vital as insurance, you want a company like True Rate that you can count on to help you build the right plan at the best possible price.

Car Insurance in Los Angeles

What is exactly is car insurance?

Automobile insurance is simply a contract that helps pay for certain types of financial losses or obligations resulting from the use or ownership of an automobile. To obtain this contract (insurance policy), you pay a specified amount of money called a premium. In return for the premium paid, the insurance company agrees to pay certain expenses and legal liabilities depending on the terms of the insurance policy. Having the right insurance coverage may prevent you from suffering a large financial loss in the event of an automobile accident.

The responsibilities of owning and driving an automobile include following the financial responsibility laws under the Vehicle Code. The most common way to satisfy the financial responsibility for operating an automobile in California is by purchasing automobile liability insurance.

If you choose to meet your financial responsibility by purchasing liability insurance, the DMV outlines minimum limits that you must purchase under Section 16451 of the Vehicle Code.

Financial Responsibility Laws

The statutory minimum limits of liability insurance in California* are as follows:

Bodily Injury Liability

• $15,000 for death or injury of any one person, any one accident.
• $30,000 for all persons in any one accident.

Property Damage Liability

• $5,000 for any one accident.

There are four ways to accomplish financial responsibility:

1. Coverage by a motor vehicle or automobile liability insurance policy;
2. A cash deposit of $35,000 with the DMV;
3. A certificate of self-insurance issued by DMV to owners of fleets of more than 25 vehicles; or
4. A surety bond for $35,000 obtained from an insurance company licensed to do business in California.

All California drivers and owners must have at least the statutory limits of minimum liability insurance or an approved alternative way to pay for injury or property damage they may cause.* Penalties are very severe for non-compliance with this section of the vehicle code.

When your car is in an accident for which you are found legally liable, bodily injury (BI) liability covers your liability to others for injuries to them. Property damage (PD) liability covers your liability for damage to someone else's property.

A policy with BI of $15,000/$30,000 and PD of $5,000 will pay out as follows:

• The maximum limit for one person's injuries, medical expenses, etc. is $15,000 under the bodily injury portion;
• If two or more people are injured, the maximum limit for the accident will be $30,000;
• The maximum limit for damage to other people's property (their car, their fence, etc.) is $5,000.

Comprehensive coverage (other than collision), uninsured motorist, medical payments and collision insurance are not required by law.

(Source)
*See California Low Cost Automobile Insurance exception.

Los Angeles

Los Angeles was founded on September 4, 1781, by Spanish governor Felipe de Neve. It became a part of Mexico in 1821 following the Mexican War of Independence. In 1848, at the end of the Mexican–American War, Los Angeles and the rest of California were purchased as part of the Treaty of Guadalupe Hidalgo, thereby becoming part of the United States. Los Angeles was incorporated as a municipality on April 4, 1850, five months before California achieved statehood.


Nicknamed the City of Angels, Los Angeles is a leading world center of business, international trade, entertainment, culture, media, fashion, science, sports, technology, and education, and has been ranked the third richest city and fifth most powerful and influential city in the world. The city is home to renowned institutions covering a broad range of professional and cultural fields and is one of the most substantial economic engines within the United States. The Los Angeles combined statistical area (CSA) has a gross metropolitan product (GMP) of $831 billion (as of 2008), making it the third largest economic center in the world, after the Greater Tokyo and New York metropolitan areas. As the home base of Hollywood, it is also known as the "Entertainment Capital of the World," leading the world in the creation of television productions, video games, and recorded music; it is also one of the leaders in motion picture production. The importance of the entertainment business to the city has led many celebrities to call Los Angeles and its surrounding suburbs home. Additionally, Los Angeles hosted the Summer Olympic Games in 1932 and 1984. (Source)

At True Rate Insurance, we welcome your calls and questions at anytime – whether you are one of our customers, a prospective buyer or someone covered by another insurance company all together. Unlike some companies, we at True Rate Insurance will sit down and go over your questions on an individual basis – no strings attached. For honest, customized and stress-free Los Angeles car insurance advice, contact me, Engy Ramadan, at True Rate Insurance today. Simply call 323-735-1600.