What Happens if You Total a Leased Car?

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jul 18, 2021

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What You Should Know

  • It’s still required to have an insurance policy for a leased car, despite not technically owning it
  • Your leasing company may require you to purchase both a comprehensive car insurance policy and collision coverage
  • If you believe that you are not at-fault for the accident, you can pursue a claim just as you would if you owned the car

Totaling a leased car is an unsettling experience for any motor vehicle driver. Following an accident, your first concern should always be the health of you and other riders involved in the accident. In the event of an injury, seek out medical assistance immediately and document the accident with law enforcement if necessary. 

But what about the leased vehicle itself? How do you ensure you’re protected financially? How much does insurance go up after an accident?

After an accident that causes a totaled car—any car—there’s a lot to think about. Don’t worry. We have a step-by-step guide for how to handle the aftermath. Below, we’ll cover:

  • How to make sure you’re okay
  • How to check the coverage on your insurance
  • Who to contact following a collision
  • How to file an insurance claim

#1 Make Sure You’re Okay

Figuring out what to do after a minor car accident vs. a severe accident can be quite different. In the event of a severe accident, always prioritize your health and safety, as well as the health and safety of any other people involved in the collision. If you’re capable, call 911 as soon as you exit your car and get a safe distance from the accident site. Make sure to stay on the scene to avoid a potential hit and run felony.

The dispatcher will automatically dispatch the police and inquire into whether an ambulance is needed. In the event of a totaled car, it’s likely a good idea to say yes. Even minor collisions have the potential of causing serious injuries. 

Tip: If you’re capable, take plenty of on-site photos of your totaled car with different lighting and angles to provide to your insurance agency when you file a claim. 

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#2 Check the Coverage on Your Insurance

It’s still required to have an insurance policy for a leased car, despite not technically owning it. To that end, check your car insurance plan to identify your coverage policies.

When you bought an insurance plan, you likely had to purchase liability coverage and uninsured motorist coverage, as these are typically required by law in most states. 

  • If you get in an accident and cause property or bodily damage to another driver, liability coverage will help you pay for the expenses.
  • Conversely, uninsured motorist coverage helps pay for your own medical bills if your car is totaled at the fault of an uninsured driver. 

Your leasing company may also require you to purchase both a comprehensive car insurance policy and collision coverage in order to protect its financial interests in the event of an accident. 

  • Comprehensive coverage helps pay for repairs in the event of damage caused by something other than a collision, such as theft, vandalism, or a falling anvil. 

There’s also something called gap insurance coverage, which is included in most car leasing contracts.1 

  • Gap insurance coverage helps you continue to pay back your loan if your leased car is totaled or stolen and you still owe more than the car’s depreciated value. (The depreciated value refers to the difference in the car’s market value before and after the accident.)

When shopping for car insurance, always reference your leasing agreement to ensure you acquire the correct coverage to meet your lease’s minimum requirements.

Now that it’s time to use it, be sure to double-check your policy limits to know how much coverage you have.

#3 Contact Need-To-Know Parties

Now that you’ve meticulously reviewed your insurance policies, it’s time to call your insurer and the leasing company.

It’s important to notify your insurer of the accident immediately. In general, the best time to inform your insurer of the accident is within the 24-hour range following the accident. 

Your insurance company will then set up an appointment with a claim’s adjuster to inspect the car’s damage. Most likely the insurance employee will instruct you how to seek a repair, and direct you to a body shop to complete the repair estimate. 

Once you’ve done this, contact the car’s leasing company. Your leasing company will most likely require specific stipulations regarding repairs.

Tip: When filing a collision claim with your insurance, keep track of over-the-phone conversations and any referrals provided by your insurance agent. Should these referrals be different from your leasing company’s referrals (e.g., both companies want you to use different body shops to get a repair estimate), you’ll want to have this documented.

#4 Pursue a Claim Over the Accident

If you believe that you are not at-fault for the accident, you can pursue a claim just as you would if you owned the car. Typical car accident settlements can be pricey so make sure you are in the right hands if you are on the other side of the accident. 

In addition to contacting your insurance company and leasing agency, you must also contact the other driver’s insurance company to inform them of the accident. During the phone call, include all relevant information, including details of the accident, as well as when and where it took place. 

At that point, the other driver’s insurance company will either accept or dispute your claim. If accepted, the company will direct you to its repair estimates. If denied, you may repair the car with the collision coverage provided by your insurance provider or sue the other driver. Note that litigation proceedings are both expensive and lengthy—although they may be necessary. 

Tip: Submit your paperwork as soon as possible to expedite the process. Ensure your signature is an exact match to that on your policy contract. 

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When acquiring a leased car, it’s important to ensure you’re covered in the case of an accident or collision. That way, should you ever be in a situation where you’re pulling your hair out and thinking, “I can’t believe I totaled my leased car”—you don’t have to panic.

4AutoInsuranceQuote.com will match you with the most affordable car insurance rates from the top insurance providers in the country to ensure you and your loved ones are protected.

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  1. Naqvi Injury Law. What Happens If You Total A Leased Car? https://naqvilaw.com/what-happens-if-you-total-a-leased-car/

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