No Fault Insurance

• No fault insurance is a term used to describe the state mandated coverages. These coverages insure other drivers against the injuries and damages that you may cause to them during an accident. These coverages include bodily injury and property damage coverages, as well as personal injury protection and uninsured and underinsured motorist coverages. Each state has its own minimum requirement combination for no fault insurance. These coverages do not protect your vehicle from damage.
  
  

Minimum Requirements

• Every driver is required to meet the minimum state insurance requirements. However, if you have a leased vehicle, you may be required to carry higher limits of liability. Many auto lease contracts require owners to carry a minimum of $100,000 per person, $300,000 per accident and $100,000 in property damage. Some leasing agreements, however, allow the driver to carry lower amounts of liability. It is important to identify these insurance requirements prior to completing the purchase, since your failure to carry the appropriate limits could void your lease agreement.
  
  

Property Damage Coverages

• In addition to the higher levels of liability, most leasing contracts require owners to carry physical damage coverages on their vehicle. These physical damage coverages protect the leased vehicle from fire, theft, damage from nature and animals and damage caused by colliding with another object. Physical damage coverage consists of comprehensive and collision coverage, both of which require a selected deductible.
  
  

Additional Coverages

• Although the leasing agreement and state mandated regulations do not require it, you can select additional coverages to protect your vehicle and potential mishaps. Coverages such as rental reimbursement and roadside assistance are beneficial in the event of an accident. The towing coverage will safely remove your vehicle from the scene of the accident and transport it to the repair facility. The rental reimbursement will place you in a rental vehicle while your vehicle is being repaired. Gap insurance is also an ideal selection for a leased vehicle. This coverage insures the difference between the fair market value of the vehicle and its leased amount, if the vehicle is totaled.