Leased Car Accident Not My Fault: What Happens, Insurance Rules & What to Do Next

By Emery Ledger on December 2, 2025

You may be wondering what happens when you’ve been in a leased car accident not my fault. A lease means you don’t own the car, but you’re responsible for its upkeep and condition, which makes dealing with an accident more difficult. You have to notify the insurance company, the leasing company, prove that you’re not at fault, and get the car repaired if possible. Read on to learn more about how to resolve the issue of an accident that wasn’t your fault in a leased car. 

What Does It Mean to Lease a Car? 

There are a few major differences when it comes to leasing a car vs owning a car. A car lease means you have to follow the rules and restrictions outlined in the lease, then turn the car back to the dealership at the end of the lease period. Owning a car means it’s yours to keep and sell when you like, as long as you pay off the financing. 

When you lease or buy a car, you have to show financial responsibility in the form of buying adequate insurance coverage. A leasing company typically requires you to get a higher-limit insurance policy than the state minimum requirements. You’re also required to return the car to the leasing agency in good condition once the lease has finished. 

An accident with a leased car is handled differently from a car that you own. The leasing company has a higher standard for insurance, the quality of the repairs, and how the accident affects the value of the car. Read on to learn more about what to do in an accident on leased car that’s not your fault. 

Lease Car Accident Not My Fault — What to Do First 

There are steps that you should take immediately after an accident. Make sure you’re OK, call the police if you’re able to, and collect evidence. You have to contact your insurance company and let it know that you’ve been in a car accident leased car. 

Do your best to document the damage to the car as well as show how the accident happened. The goal is to show who’s at fault, and you can do this by taking pictures of the final position of the cars, tire tracks in the street, and the field of debris.

Make sure to contact the leasing company as soon as you can. This is most likely a clause in your leasing contract, but notifying them quickly also preserves vital information about the crash. 

Who to Notify in a Leased Car Accident

After you’ve been in an accident with a leased car, you have to notify both the insurer and leasing company about the accident. Both parties have to be notified as soon as possible after the accident so they’re prepared to do their post-accident processes. 

Each party is going to need accident documentation that may include:

• Accident report
• Pictures of the car including damaged and non-damaged areas
• Repair estimates if necessary

Make sure to follow the rules when it comes to who to notify after a car accident leased car. This saves you time and trouble down the road. 

Understanding Insurance for Leased Cars

The contract for leasing a car requires you to carry an insurance policy with collision and comprehensive coverage. It will also lay out the coverage amounts you need in the policy. This level of insurance tends to be more expensive, but it will handle accidents that are caused by other drives, and are not your fault. 

Role of Gap Insurance in Leased Car Protection

GAP insurance, also known as guaranteed asset protection coverage, works by paying the difference between the vehicle’s ACV and what you owe on a lease after an accident. You don’t have to pay the difference to the leasing company because the insurance takes care of it for you. 

What Happens If the Leased Car Is Repairable?

You are the party responsible for repairing a leased car, and you handle the repairs in conjunction with the insurance company. The lease contract may require you to repair the car with OEM parts and body damage has to be repaired to its original condition. The leasing company may also require that you take the car to an approved repair shop. 

What Happens When a Leased Car Is Totaled?

A leased vehicle is considered a total loss by the insurance company if the repairs are more than 70% to 80% of the car’s actual value. The insurance company pays out the current cash value of the car to the leasing company, and you’re responsible for the remaining balance. GAP coverage can prevent you from having to pay most or all of the balance. 

Total Loss Meaning in Insurance

A total loss means that the car can’t be repaired in accordance with its actual cash value. That is, the cost of the repairs exceeds the value of the car after a certain percentage point. The percentage is anywhere from 70% to 80% because some states have a legal definition of a totaled car. 

All vehicles have something known as an actual cash value (ACV). The ACV is determined by the Kelly Blue Book (KBB). If the repair estimate is more than the insurance company or state maximum percentage, the car is considered totaled. 

Who Is Responsible for Damages in a Leased Car Crash?

Assigning responsibility for damages, also known for who’s at fault or partially at fault, depends on the circumstances leading up to the accident. If you were operating your car within the law, and you get hit by someone disobeying the law, you bear no fault. However, if you made a move that obstructed the other driver in some way, you’re at fault and responsible for the damages.

What If the Accident Was Not My Fault?

You have the opportunity to enforce your rights as an accident victim, and you can sue the at-fault driver for compensation. Some of the things you can claim compensation for include:

• Medical bill coverage
• Lost wages
• Reimbursement for rental car
• Property damage

Being able to prove that you weren’t at fault can help you get your bills covered with less of a fight from the opposing party. 

Returning a Leased Car After an Accident

The leasing company is aware that you’re returning a repaired vehicle, and it will do a thorough inspection to make sure it was repaired correctly.  If you decide to turn the car back in after an accident, you’ll have to pay early termination fees, the difference in value and what you owe, and fees because of poor work. 

Lease Termination and Double Charges After an Accident

Terminating the lease after an accident can be more costly than keeping the car until the lease ends. An early termination fee applies and is usually based on the amount of money left to pay on the lease.

You’ll also have to pay the difference between the ACV and current value of the car after it’s been damaged and repaired. Review your contract before you decide to turn in the car early, and contact the leasing company to find out about your options.

Common Insurance Mistakes to Avoid With a Leased Car

Don’t assume that you can get a standard auto insurance policy with a leased car and think it’s sufficient. Get the coverage that’s required by your contract, and get GAP insurance to protect your lease vehicle. 

Make sure to inform the leasing company as soon as possible after an accident. They’re the owner of the car and need to be aware of damage to their property. 

Last, but not least, follow the claims process according to the insurance company’s rules and requirements. Failure to do so can result in a denied claim that’s difficult to overcome. 

How to File an Insurance Claim for a Leased Car Accident

Begin by collecting evidence from the accident, then reporting to the insurer and leasing company. Both will ask you for documentation, and may ask you to get estimates for repairs. It’s in your best interest to work with them and give them the information they ask for. Make sure you keep ahead of deadlines to prevent small problems from becoming big ones. 

Conclusion

You need to protect yourself against as many contingencies as possible through insurance. This is even more important with a leased vehicle. Contacting a car accident lawyer can help you when a leased car accident not my fault happens, and you’re not sure about what to do next.

At Ledger Law, we have a team of lawyers with experience of helping people after an accident on leased car. We’re here to guide you through the claims process and negotiate on your behalf for the best possible settlement. Contact us today to set up a consultation with a car accident lawyer and find out why we’re your best option for legal representation. 

FAQs About Leased Car Accident Not My Fault

What should I do after a leased car accident not my fault?

Call the police first, then contact your leasing company. Also, contact your insurance company and the insurer for the offending driver. 

Does insurance cover an accident on a leased car if I’m not at fault?

Yes, insurance will cover an accident on a leased car even if you’re not at fault. 

Who pays for repairs in a car accident with a leased car?

The insurer pays for the repairs on a leased car as long as you have proper insurance. 

Do I still owe payments if my leased car is totaled in an accident?

You may still owe on a leased car if you don’t have enough insurance to cover the actual cost value of the car at the time of the accident. 

Can I return a leased car after an accident on a leased vehicle?

Yes, but the car has to be repaired and restored to its original condition, or as closely as possible.

Do I need a lawyer after a leased car accident not my fault?

It’s always a good idea to retain a lawyer after a car accident because the other party’s insurance company will take advantage of you if you’re not represented by a lawyer. 

Emery Ledger

Emery Brett Ledger brings more than 27 years of experience to personal injury law. He founded & led The Ledger Law Firm in securing over $100 million in compensation for clients with life-altering injuries & complex claims. Licensed in California, Texas, & Washington, Emery earned his law degree from Pepperdine University School of Law. His practice areas include car & truck accidents, wrongful death, catastrophic injuries, maritime claims, & mass tort litigation. He has been recognized by The National Trial Lawyers’ Top 100, Mass Tort Trial Lawyers Top 25, and America’s Top 100 Personal Injury Attorneys. Emery also received the 2025 Elite Lawyer Award & holds a perfect 10.0 Avvo rating with Platinum Client Champion status. His legal work has been featured on CNN, Forbes, NBC, & ABC.