Reader’s Question:

Someone told me that if you lease a vehicle, the lease company pays most of the auto insurance since it is technically still their vehicle. is this true? We live in O’Fallon, Missouri.

Viktor

O’Fallon, MO

To the best of my knowledge it is not true that a lease company will pay for automobile insurance on a car that you are leasing from them. Typically, the leasing company that owns the car that you are leasing states in the leasing documents that you are responsible for carrying not only the state minimum mandated liability car insurance on the automobile but physical damage coverages of comprehensive and collision.

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If you do not carry the physical insurance on the vehicle in MO and the leasing company finds out, it could be a breach of your leasing contract. What could happen because of this would be determined by the terms of your leasing contract. It is possible that the leasing company takes out “forced” insurance on the car, which would cover their asset. Normally forced insurance is charged to you if you let the required auto insurance lapse.