Leasing a vehicle has several advantages, such being able to drive a newer car worrying about the financial obligations that come with owning a newer vehicle. However, there are certain things to consider when driving a leased vehicle. Knowing how a lease affects an insurance claim after a crash is important.
The experienced Green Bay car accident lawyers from our firm explain the options available after an accident in a leased vehicle and the differences in how your claim may be handled. We are prepared to review your situation and discuss your rights in a free, no-obligation legal consultation.
What is a Leased Vehicle?
A leased vehicle is a long-term car rental that usually includes the option to purchase the vehicle at the end of the lease term. If you do not choose to purchase the vehicle outright, you return the vehicle at the end of the lease term.
During the lease, you do not own the vehicle. You make a monthly payment during the lease term in exchange for the privilege of driving the car. While the car is in your possession, you are responsible for paying for maintenance and repair on the vehicle.
Insurance Required for Leased Vehicles
Like other vehicles in Wisconsin, leased vehicles must have liability insurance. This coverage helps pays for medical bills, property damage and other damages to drivers, passengers and pedestrians who are injured by an at-fault driver, up to policy limits. The minimum amount of liability insurance Wisconsin drivers must carry is:
- $25,000 for bodily injury or death of a single person
- $50,000 for bodily injury or death for two or more people per accident
- $10,000 in property damage per accident
Additionally, lease agreements will often require the driver to maintain comprehensive and collision insurance. Review your agreement to ensure you are aware of your minimum insurance requirements and that you comply with them.
Are Repairs Covered in the Event of an Accident?
Whether repairs are covered depends on the type of insurance you have. If you have comprehensive and collision insurance, repairs are covered. If you only have liability insurance, repairs are not covered.
If the other driver was at fault for the accident, you can pursue a claim against him or her to get the damages covered by his or her insurance carrier.
Additionally, any damages that you sustain will only be paid up to the policy limits. Therefore, if you are involved in a serious accident that causes $13,000 in damages and your property damage coverage is only $10,000, you will be responsible for paying for the remaining $3,000, plus any deductible.
You may have specific requirements related to the type of repairs you receive under your lease agreement. For example, you may be required to receive repairs at only certified or specific auto repair shops. Check your lease agreement for any such provisions and contact the company providing the lease for further information.
What if the Vehicle Gets Totaled?
When you get in a collision and take your vehicle to a body shop, a representative will evaluate the damage to your vehicle. If the cost to repair the vehicle is more than its value, the insurance company may declare the vehicle a total loss. In this case, the insurance company will pay for the current value of the vehicle.
However, there may be a difference between the value of the vehicle and what you still owed on the lease. You are still financially responsible for this difference. Your lease agreement will state whether you are responsible for this difference. Additionally, you may be able to purchase gap insurance that covers the difference in this situation.
Filing a Claim After a Crash
If another driver caused the accident, the process of pursuing compensation for the damages you sustained works the same way as if you owned the vehicle without a lease. You can contact the insurance company that covers the at-fault driver and file a claim. Provide basic information about the accident. Alternatively, you could cover the repairs under your own policy under the collision coverage.
Contact an Experienced Attorney for Help
If you are involved in an accident in a leased vehicle, our knowledgeable legal team at Sigman Janssen looks forward to discussing your options with you and helping you determine the best plan forward.
We are ready to explain the steps necessary to fulfill the terms of your lease while also looking for ways to maximize your compensation. We are also prepared to help you identify the damages you may be eligible to receive and how to claim compensation for these damages.
Our consultations are free and there are no upfront costs unless we help you obtain compensation.
There is no risk in calling us. (877) 888-5201.