Eason & Tambornini, A Law Corporation

Call for a FREE Consultation: (916) 438-1819 or (800) 391-8219
Hablamos Español Мы говорим по-русски

Call for a FREE Consultation:
(916) 438-1819 or (800) 391-8219
Hablamos Español
Мы говорим по-русски

What happens if you’re involved in an accident in your leased vehicle?

By definition, a lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for the use of an asset. You can lease real estate, office space, cars, and even wedding dresses! You possess the asset (in our case, the vehicle), for the term of the lease, but you do not own it. Even if the lease agreement contains an option to purchase the vehicle at the end of the lease, you still do not own the vehicle for the duration of the lease.

So, what happens if you’re involved in an accident in your leased vehicle? While much of the process is the same with a leased vehicle as with a vehicle you own, there are some unique legal issues that can arise. While you don’t technically own the vehicle, you are most likely responsible for damages stemming from a car accident. You will find that the terms of the lease agreement will determine what you are required to do and explain your obligations to the leasing company.

In most cases, you are responsible for making sure the vehicle has insurance that covers its purchased price. Most leasing companies usually require you to carry at least $100,000 for bodily injury for one person, $300,000 for bodily injury for multiple people and at least $50,000 for property damage. Extensive coverage above and beyond the mandatory minimums is recommended with leased vehicles to protect you if an accident occurs.

If you are involved in an accident, you will need to document the damage to the car. If possible, take pictures and obtain copies of police reports. You can submit these to your insurance company. Additionally, take the car to an automotive service center designated by the leasing company so they can assess the full damage of the car and provide an estimate of how much the repair will cost. This documentation is important when filing insurance claims.

When the leasing company receives the report and repair estimate you should receive the specified amount of funds to fix the car. Unfortunately, the process isn’t always this simple. For example, if you are in an accident and your leased vehicle is “totaled”, the insurance company (yours or the other driver’s) will likely be responsible for the “actual cash value” of the car. But, if the cash value is not enough to cover the remainder of what you owe for the car’s lease, you may have to pay the difference. Investing in a gap insurance policy can help make up the difference between what is owed and the actual value of the car.

It’s important you thoroughly understand the terms of your leasing agreement right from the start. Accidents involving a leased vehicle can be complicated. Let the Sacramento car accident lawyer at Eason & Tambornini, A Law Corporation help you navigate the process so you can receive the compensation you are owed.