Third-party insurance is the legal minimum requirement to drive in the UK. It covers damage to any other vehicle, person or property that may result from an accident that is deemed your fault. However, leasing contracts require you to take out a fully comprehensive insurance policy for your lease vehicle. While third-party policies only cover damage to others, comprehensive policies cover damage to your car as well.
If you were involved in an accident without comprehensive insurance, you would have to pay the lease company back for the full value of the car. You can also take out Guaranteed Asset Protection (GAP) insurance, which is an optional policy that covers the difference between the current market value of the car and the amount you owe for the lease agreement.
You don’t need gap insurance on a leased car, as it’s not a legal requirement and is designed to work alongside your comprehensive policy. However, some leasing contracts may suggest that you take out gap insurance to ensure greater protection against damage or theft.