How Does an Accident Affect a Car Lease?

how does an accident affect a car lease
New York City Personal Injury Lawyer I Greenberg & Stein, P.C.

Nowadays, leasing cars has become a very common practice, since 2017 about one in every three cars is leased. For this same reason, it is more common to see leased cars involved in crashes every day. You may be wondering if the condition of the car would alter the process following a car accident. Short answer is no, an automobile accident will not affect your lease. Most procedures will be the same as if you owned the car, but there might be some differences or things you will have to take into account depending on the severity of the accident.

What Happens if You Crash a Leased Car in New York?

Like previously stated, even if the car is leased, you will have to follow the same steps to report the accident to the authorities and to the insurance company as any other driver. Because New York is a “No-Fault” state, ALL drivers are required to carry “No Fault Insurance,” which covers medical costs, lost wages, and other out-of-pocket expenditures regardless of who is at fault. You can also opt out of the no-fault system if your injuries are severe enough to warrant filing a personal injury lawsuit. Leasing a car is essentially similar to renting a vehicle, you are paying to use a car that is not yours. One significant distinction between renting and leasing a car is that when you rent a car, the owner insures it. When you lease an automobile, you must pay for insurance, just as when you own one. If you are ever involved in an accident, the insurance that you pay for will be liable for covering the losses. Nonetheless, if you have a leased car, following the accident you must report the collision to the leasing company or dealership.

What to Do After a Leased Car Accident in New York?

Regardless if you own or lease a car, you have to go through the same steps to report the accident to the authorities and to the insurance company to file a claim.

  1. The first thing that you have to do after a car accident, is to make sure that you and the passengers are not hurt. If anyone is hurt, seek medical attention as quickly as possible.
  2. If you are not hurt, the next step is to remain at the scene of the collision and exchange information with the other drivers. You must gather critical information such as the driver’s name, driver’s license number, insurance company name, and insurance policy number. You must also give this information to the other party.
  3. Report the accident to the nearest police station. Even if no police officer arrives at the scene of the vehicle accident, you can go to the police station later and seek a copy of the accident report. This could be useful in the future. Additionally, if the accident causes a fatality, personal injury or damages over $1000 to a person’s property you must report the accident to the Department of Motor Vehicles of New York within 10 days using the form MV-104.
  4. Gather as much evidence as you can. Take photos or videos of the accident scene, as well as the damage to any vehicles involved and your injuries. You can also get the names and phone numbers of witnesses to the crash. All of this information could be useful in the event of a claim or perhaps a personal injury lawsuit.
  5. Notify your insurance company right away. If you forget to notify your insurance company about the accident or just refuse to do so, your chances of collecting compensation could be reduced.
  6. Report the accident to the leasing company. Remember that even if you pay for the insurance of the leased car, that vehicle is not yours. This means that the leasing company needs to be informed as soon as possible.

Lease Cars Insurance Coverage in New York

Leasing a car does not differ much to owning a car in terms of insurance. You still have to get an insurance policy and if you are in New York you also have to meet the requirements established by the “No-Fault” laws. Depending on the leasing company or dealership that owns the car, they may require additional coverage, for example, gap coverage. Aside from that, the claiming process is the same with leased or owned cars. When you file a claim with the insurance company, they will ask you to provide some estimates for the car repairs. They will pay for the repairs (as long as your coverage is sufficient to pay for them) minus the deductible.

What Happens if My Lease Car is Totaled?

If you totaled a leased car, you must still pay the leasing company the remaining installments on that vehicle. If the vehicle is a total loss, your insurance provider will pay for the vehicle’s current market value. For example, if the current worth of the vehicle is $8,000 and the total of your remaining payments is $10,000, the insurance company will pay $8,000 minus the deductible, leaving you to pay the remaining balance. This is where gap insurance comes in. Gap insurance will pay the difference between what the insurance provider pays and what you owe the leasing company.

When Should You File a Lawsuit After an Accident in a Leased Car?

You should file a personal lawsuit when your injuries are considered serious according to the laws of the state of New York and/or your medical bills are more than the maximum recoverable amount which is $50,000. Here is a list of injuries that can be classified as serious and will allow you to step out of the No-Fault system:

  • Death
  • Dismemberment
  • Significant disfigurement
  • Fracture
  • Loss of a fetus
  • Permanent loss of a body organ or member
  • Significant limitation of use of a body function or system

New York Personal Injury Attorneys

Car accidents can cause victims to feel very stressed and dealing with injuries and all the procedures that involve filing a claim or a personal injury lawyer might be overwhelming. If you have a leased car and you are afraid of how an accident could affect your lease, you should seek legal assistance. An experienced lawyer will not only answer all of your questions regarding the impact of the accident to your lease, but they will also help you in every step of the claiming process. At Greenberg & Stein P.C. You will find some of the best lawyers in New York, our attorneys have years of experience handling all kinds of cases and helping car accident victims recover compensation. The most important thing is to take action quickly. If you have recently been involved in a car accident and you want to get the best legal assistance possible, contact us at 212-969-8784 to schedule a free case review with one of our lawyers.