If you are among the majority of people who either lease or finance their new automobile, you may find that your car insurance needs are different from someone who owns his car outright. It is important to know and understand the differences that exist, or you may be in for an expected shock in the event of an accident.

The first step to understanding your insurance needs is to check your loan or leasing agreement. The type of insurance necessary is usually listed in your agreement. It is normal for financial institutions to require comprehensive and collision coverage for leased or financed automobiles. Be aware that in most cases the minimum liability limits for a leased or financed vehicle will be higher than your state's minimum allowable level.

The higher liability limits are meant to protect the financial institution in the event of an accident. It is important to note that if an accident occurs and your leased or financed car is a total loss, you will only receive the current market value. Make sure not to over insure your vehicle, but often it is a good idea to choose a limit higher than your agreement minimum in order to give yourself peace of mind.

Before you purchase your automobile insurance spend some time comparing insurance agents. Remember to compare national and local insurance agents, both on the internet and in person. Spending a little time shopping around now can save you a lot of money later.