Does a Co-Applicant on an Auto Lease Have to Have Car Insurance?

by Mary Jane Freeman
As a condition of the lease, you'll probably be required to purchase auto insurance.

In general, an auto lease is a contract between the applicant and leasing company, typically a car dealership, in which the dealer gives the applicant use of a vehicle for a specific amount of time in exchange for agreed-upon payments. Typically, applicants are required to maintain insurance on the vehicle during the lease period. If there is more than one applicant, the dealer or insurance company may require the policy to be in both names.

Co-Applicant Equally Responsible

If you are the co-applicant on an auto lease, you and the other applicant are equally responsible for the car. Not only do you have equal rights in the use of the vehicle, but you are both responsible for making payments on it. If the required payments are not made, both of you will be in default, which means the late payments will appear on each of your credit reports, including any repossession.

Names on Policy Depend on Lease or Insurance Terms

As the co-applicant of a car lease, you are also equally responsible for any damage to the vehicle as well as any accidents or parking tickets. The same is true concerning insurance coverage. In fact, the leasing company will likely require you to have auto insurance on the vehicle and at specific limits. However, whether both names must appear on the policy depends on the terms of the lease and rules of the insurance company. Even if both names are not required, it may be prudent to include them anyway, since you and the other applicant share liability for the vehicle.

About the Author

Based on the West Coast, Mary Jane Freeman has been writing professionally since 1994, specializing in the topics of business and law. Freeman's work has appeared in a variety of publications, including LegalZoom, Essence, Reuters and Chicago Sun-Times. Freeman holds a Master of Science in public policy and management and Juris Doctor. Freeman is self-employed and works as a policy analyst and legal consultant.

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