Car lease protection insurance

What is car lease protection insurance?

Car lease protection insurance can pay your lease repayments on your behalf if you're unable to do so yourself, due to involuntary unemployment. Some policies also include sickness and accidents as claimable events, but not all.

Every policy is different but the following rules typically apply:

• Involuntary employment relates to redundancy only and the redundancy must have been involuntary
• If you are fired or quit, cover doesn't apply
• Some providers won't cover you if the redundancy occurs within the first 30 days of purchasing the insurance

Pros and cons of car lease protection insurance

Pros:
• It provides cover for redundancy, other types of insurance, like income protection, do not.
• It can provide peace of mind.

Cons:

• It's very specific insurance so cover will only be paid out in the event of specific circumstances.
• It's an additional expense so you'll need to weigh up if the benefits outweigh the expense.

Where can I buy car lease protection insurance?

There are a few providers in Australia who offer car lease protection insurance. Here are some options:

• Stratton Finance
• beCarWise
• Maxxia
• RemServ
• Autopia

What's the difference between lease protection insurance and income protection insurance?

Car lease protection insurance is specific to your car. The payout can only be used for repayments owed on your car lease. Additionally, car lease protection can cover you for a period of time if you are made redundant. This is a unique feature, there aren't many insurance products that cover you for redundancy.

Income protection insurance is broader; it will pay a monthly amount that can be used for a range of things like your mortgage, ongoing family expenses, general bills and more. Income protection pays out if you need to take time off work due a sudden accident or illness. Ironically, income protection does not cover redundancy.

FAQs

• Is gap insurance the same as car lease protection?

  No, these are different insurance products. Gap insurance can help you if your car is written off and your comprehensive car insurance policy doesn't cover the full amount you owe to your financier. For example, you bought your car for $40,000 using a loan or lease but your insurance policy only covers your car for $35,000. Gap insurance could pay the remaining $5,000 for you.

  Car lease protection insurance is specific to your car lease (not loan) and is typically only in relation to being unable to make repayments due to involuntary unemployment. It's designed to help you continue to make repayments while you navigate through a period of unemployment.

• Is car lease protection the same as car loan protection?

  It is a different product to lease insurance but it functions much the same. It's also known as Consumer Credit Insurance (CCI) and it makes payments on your behalf when you aren't able to afford the car loan repayments for an insurable reason.

• Does car lease insurance cover redundancy?

  Yes, car lease insurance is one of the only insurance products to cover redundancy. However, be aware of the terms and conditions that apply to this. For example, the redundancy has to have been involuntary and unforeseen. Cover is also often limited to a certain amount.

Written by

Peta Taylor

Publisher of Insurance

Peta Taylor is a publisher at Finder, working across all of insurance. She's been analysing product disclosure statements and publishing articles for over 2 years. Peta is passionate about demystifying complex insurance products to help users make well educated decisions with confidence. Peta is part of Finder's insurance awards team and works alongside editorial and insights experts to bring users the best insurance products every year. See full bio