Lease Car Liability If Crashed/Stolen?

[trowelhead]

Just a quick one, i have leased (contract hire) a car via my own business.

I have insured it as normal, took out a policy in my name, stated car that the car is owned by lease company and registered keeper is lease company.

If i crash the car, and they try not to pay for any reason, or if i made a genuine mistake on my insurance application (i haven't, just hypothetical) then what liability do you have?

Do lease companies have their own underwriting incase you crash or disappear with the car? I'm worried that let's say the car is stolen, insurance refuses to pay and then the lease company invoices you for the full retail price of the car!

I'm assuming the lease company would be insured in some way before handing over the keys? So generally, is your liability capped in any way?

Cheers!

[CaptainSlow]

You're fully liable. Read your contract to understand what the charges will be.

[trowelhead]

CaptainSlow said:

You're fully liable. Read your contract to understand what the charges will be.

Oh balls! Better not crash it then Thanks for the reply.

[Sheepshanks]

trowelhead said:

Just a quick one, i have leased (contract hire) a car via my own business.

I have insured it as normal, took out a policy in my name, stated car that the car is owned by lease company and registered keeper is lease company.

If i crash the car, and they try not to pay for any reason, or if i made a genuine mistake on my insurance application (i haven't, just hypothetical) then what liability do you have?

Do lease companies have their own underwriting incase you crash or disappear with the car? I'm worried that let's say the car is stolen, insurance refuses to pay and then the lease company invoices you for the full retail price of the car!

I'm assuming the lease company would be insured in some way before handing over the keys? So generally, is your liability capped in any way?

Cheers!

Hmmm... odd set of "hypothetical" questions.

I could be wrong about this, but it doesn't feel right that you've insured the car in a personal capacity if the lease is held by your company.

There was someone on here just recently who was struggling to get personal insurance on a (IIRC) motor-bike that was owned by his company, and the answers were that he needed commercial, not consumer, insurance. Your situation seems the same as that.

[TwigtheWonderkid]

Sheepshanks said:

I could be wrong about this, but it doesn't feel right that you've insured the car in a personal capacity if the lease is held by your company.

That's fine, so long as all fully disclosed.

The lease firm may well have a contingency insurance (in plain speak, insurance against the failure of insurance) but that wouldn't stop them suing you. If they successfully sued you, they would repay their contingency insurers. Or they might only claim on the their policy after they'd sued you and failed.

[anonymous-user]

trowelhead said:

Oh balls! Better not crash it then Thanks for the reply.

Insurance pays out, no problem?

[james7]

I know someone who let their insurance on a lease car lapse (they forgot to renew). They discovered when it got stolen.
Had to pay the lease company iro 40k iirc

[LoonR1]

It's a hell of a coincidence that the OP has just done more or less exactly the same as a discussion on the Insurance myth thread.

If your company has leased a car for you to drive then the company should be the one insuring it, not you. Just because it's your company does not make it OK for you to insure it personally.

[S11Steve]

Along a similar scenario, one of my lease cars was written off last december, and the insurers paid out in full in February 2015. Except that they paid our customer, not us as RK.

As above, the contract will state that you are fully liable for all aspects of the hire - if the car is written off, that is still your problem, but the insurers may direct any settlement to the owner of the vehicle.

[LoonR1]

We always pay finance off first with the balance (if any) going to the driver.

[trowelhead]

LoonR1 said:

It's a hell of a coincidence that the OP has just done more or less exactly the same as a discussion on the Insurance myth thread.

If your company has leased a car for you to drive then the company should be the one insuring it, not you. Just because it's your company does not make it OK for you to insure it personally.

Ok thank you! I'll change policy over to company one asap.

There is nothing suspect going on - first time leasing a car and this is all new to me.

I spoke with Admiral (who the policy is with), and explained the situation fully, guy on the phone said no problem. However, seems he is wrong.

I have a broker (need 2 insure) who are preparing a new quote, based on it being insured via company - if anyone has any other places i can go who understand this type of situation i'd be grateful!

cheers

[trowelhead]

Also LoonR1 thanks for your contributions on this section, would have made a massive cock up there!

[trowelhead]

james7 said:

I know someone who let their insurance on a lease car lapse (they forgot to renew). They discovered when it got stolen.
Had to pay the lease company iro 40k iirc

This is my worry - and why i want to make sure my insurance is watertight!

[trowelhead]

Sheepshanks said:

Hmmm... odd set of "hypothetical" questions.

I could be wrong about this, but it doesn't feel right that you've insured the car in a personal capacity if the lease is held by your company.

There was someone on here just recently who was struggling to get personal insurance on a (IIRC) motor-bike that was owned by his company, and the answers were that he needed commercial, not consumer, insurance. Your situation seems the same as that.

ha ha - just me being paranoid. But rightly so as i have in fact insured it incorrectly - glad i posted thanks all

Genuinely not done on purpose at all, trust me i would not mess around when there is a potential 35k bill if insurance would not pay out!

[LoonR1]

trowelhead said:

Ok thank you! I'll change policy over to company one asap.

There is nothing suspect going on - first time leasing a car and this is all new to me.

I spoke with Admiral (who the policy is with), and explained the situation fully, guy on the phone said no problem. However, seems he is wrong.

I have a broker (need 2 insure) who are preparing a new quote, based on it being insured via company - if anyone has any other places i can go who understand this type of situation i'd be grateful!

cheers

It can be a bit tricky when you're both you and the company, but you need to separate yourself, much like you do when dealing with accounts. I hope you know there's going to be a benefit in kind tax to pay on the car too, I've always been advised to take the car in my name amd claim back 45p per mile (or whatever the rates are) for maximum tax efficiency.

[james7]

On a similar thought would you need gap insurance or is that side of it automatically taken care of as its a lease car?

[Sheepshanks]

trowelhead said:

I spoke with Admiral (who the policy is with), and explained the situation fully, guy on the phone said no problem. However, seems he is wrong.

Not necessarily - they might be OK with it. You could settle your mind by asking them to confirm in writing. Have you got the name of the person you spoke to, and the date and time? That way they could more easily find the recording of the call to listen to it if necessary.

[Sheepshanks]

james7 said:

On a similar thought would you need gap insurance or is that side of it automatically taken care of as its a lease car?

Normally the lease ends and needs to be settled. If the insurance company's valuation is lower than the settlement figure then you'd have to make up the difference. It shouldn't be a massive amount, and indeed there's a thread on here about a Golf R that was worth more than the settlement figure - but the insurer wouldn't pay the extra out to the policyholder.

However if you're a belt and braces person then a fairly limited value GAP policy might be worthwhile peace of mind.

[btcc123]

I had a personal lease car delivered on Wednesday.Insurance is as normal except the lease company is the owner and registered keeper.I spoke to Ford lease a few days before the car was delivered and asked if the car was stolen or written off if there was a shortfall between what you needed for the car and the insurance payment would I be liable and they said yes but in my case as I paid a fairly high initial payment would not be much.

For piece of mind I took out a Gap policy that cost £69 for £7500 worth of cover.There are three types of Gap cover so make sure you take the one that is for different finance options including leasing.

[LoonR1]

btcc123 said:

I had a personal lease car delivered on Wednesday.Insurance is as normal except the lease company is the owner and registered keeper.I spoke to Ford lease a few days before the car was delivered and asked if the car was stolen or written off if there was a shortfall between what you needed for the car and the insurance payment would I be liable and they said yes but in my case as I paid a fairly high initial payment would not be much.

For piece of mind I took out a Gap policy that cost £69 for £7500 worth of cover.There are three types of Gap cover so make sure you take the one that is for different finance options including leasing.

Very sensible and good advice. However, I just need to repeat that the OP hasn't leased it personally, his company has. His company needs to be buying all the insurance for the vehicle, that they have leased, not the OP personally.