Leasing a car is a popular option for many consumers because it typically lowers your monthly payment amount and lets you drive a new car more frequently. People who lease should familiarize themselves with their lease agreement and insurance provisions in the event of a collision. What happens if you crash a leased car in California? The overall claims process isn’t that different, but there are some other nuances you need to be aware of. Read on to learn what you need to know about leased vehicle accidents.
Required Liability Insurance
Even though you’re not technically the vehicle owner, you must carry applicable California liability insurance. In most cases, lease agreements require you to purchase full coverage insurance, which means your insurance policy should include collision and comprehensive coverage. That’s because the leasing company owns the vehicle, not you. They want to protect their asset in case of a leased car accident, theft, etc.
California insurance laws require you to carry the following amounts of liability insurance:
- $15,000 bodily injury liability for one injury per incident,
- $30,000 bodily injury liability for all injuries in one incident, and
- $5,000 in property damage.
If you want full liability coverage, the California Department of Insurance recommends 100/300 limits for bodily injury and $50,000 in property damage coverage.
Repaired Parts on a Leased Vehicle
One issue you might run into is a conflict between your lease agreement and what your insurance company covers. Most lease agreements will require all parts to be original equipment manufacturer (OEM) parts. Most insurance companies look to repair vehicles with the least expensive parts. It’s essential to check with the insurance company on what they cover in the event of an accident. Some policies will allow you to use OEM parts in certain instances. The tradeoff might be higher premiums.
If you are working on a leased car crash claim, speak with the lease company to confirm whether they will accept non-OEM replacement parts. You may need to pay the difference if the lease company refuses to compromise.
Total Losses on Leased Vehicles
It’s important to know what happens with an accident in a leased car that is a total loss. If the accident is so severe that the insurance company declares it a total loss, you might be out of pocket some money. The insurance company will pay only what the car is worth in the event of an accident. The issue occurs when you owe more than the insurance company is offering.
Consider an example where your vehicle is worth $12,000, and you still owe $18,000 to the lease company. In this situation, you only have two options. The first is to negotiate a higher settlement to cover the payoff amount. You will need to pay the difference if you cannot negotiate a higher amount. The other option is to purchase gap insurance when you get the leased vehicle. Gap insurance will cover the shortfall between an insurance company settlement and your lease payoff.
Notify the Leasing Company After an Accident
You need to advise the leasing company when you’re in a collision with a leased vehicle. It’s no different than if you were driving a friend’s car and crashed it. You must let the vehicle owner know. In this case, it’s the leasing company. You will file a claim with your insurance company and then contact the leasing company. You must do this in accordance with your lease terms. That could mean you need to notify them within 24 to 48 hours.
Contact a California Car Accident Attorney
If you are searching for information on what happens if you crash a leased car in California, contact the legal team at Silva Injury Law. Our California car accident lawyers have years of experience representing injured victims in car accidents, including ones involving leased vehicles. Our goal is to help you maximize your potential compensation and reduce or eliminate any potential personal payout to the leasing company. If another party is responsible for your actions, we will help you fight for maximum compensation.Please get in touch with our office today to schedule an initial consultation. Our experienced team will review your case and help you maximize your settlement in a leased car accident.
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