Everything you need to know about car insurance for leased vehicles.

Car leasing is a rapidly emerging market in India. It is an excellent option for individuals who are looking for a temporary commitment to owning a car for daily use and vehicle owners who are in for a business opportunity. This article goes over the concept of leased vehicle insurance and some of its vital aspects.

What is car leasing?

People commonly mistake car leasing for car renting. However, they are quite different from one another. The term duration for leasing is usually between 2 to 5 years, where the lessee has to periodically pay an amount to the lessor for using the car. This way, the lessee can use the vehicle within the contract period without actually owning it. Depending upon the vehicle choice, car leasing can be cheaper than getting a car loan.

About car insurance for leased vehicles

If you are planning on putting your vehicle up for lease, make sure to invest in good commercial car insurance. In India, motor insurance with at least third-party liability cover is mandatory by law for private and commercial-use vehicles. Also, obtaining motor insurance is crucial if you want to safeguard your business’ finances from damages or losses brought by or to your leased vehicles and individuals who use them. Leased vehicle insurance is quite different from private car insurance as you are required to purchase a commercial plan for it. However, you still get to choose between a third-party or comprehensive cover for this type of plan.

What does commercial car insurance for leased vehicles cover?

The third-party-only commercial car insurance offers protection against third-party liabilities caused by the insured car and is quite limited in terms of benefits. However, comprehensive commercial car insurance protects against damages or losses sustained by the third party and the insured vehicle. It means in terms of coverage, comprehensive commercial vehicle insurance for leased cars includes;

1. Damages or losses caused by an accident,

2. Vehicle theft,

3. Damages or losses caused by fire,

4. Damages or losses caused by natural or man-made calamities,

5. Personal accident cover,

6. Damages or losses caused to the third-party vehicle, individual or property.

What are some add-ons available with car insurance for leased vehicles?

If you opt for comprehensive coverage for your commercial vehicle insurance, you can extend your protection with optional picks in exchange for a higher premium amount. Here are some choices for add-ons you may consider:

1. Consumables cover- It covers the expenses of consumables items like engine oil, nuts, and bolts, screw, washers, etc., that are used during a repair and not generally covered under the standard plan.

2. Engine protection cover- It covers the damages or losses caused to the vehicle’s engine due to oil leakage, water ingression, etc.,

3. Roadside assistance cover- In case of a vehicle breakdown on the road, you can get emergency assistance from the insurance company with the RSA add-on in the form of on-site minor repairs, emergency fuel delivery, towing service, etc.

Conclusion:

If you are planning on putting your car up for lease, make sure to get commercial vehicle insurance for it. It is recommended to go with a comprehensive plan for its extensive coverage.

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