Advice6 min read7 views
Updated 15 November 2026 · Written by the Wahanaya.lk team
Yes, most Sri Lankan leasing companies let you pick your own insurer, but the insurer must be acceptable to them, cover must be comprehensive, and the leasing company's interest must be noted on the policy for the whole lease term.
In most cases, yes. Leasing companies in Sri Lanka generally let you choose the insurer for your leased vehicle, but the insurer has to be one the leasing company accepts, and the cover has to be comprehensive, not third-party only, for the entire lease period. For example, Central Finance's FAQ says its insurance broker subsidiary will "place the insurance with an insurer of your choice who is acceptable to us" — that one sentence sums up how most leasing companies in Sri Lanka actually work: your choice, within their comfort zone.
This matters because the vehicle's CR book usually still shows the leasing company as the absolute owner until the lease is settled. They have a real financial interest in the vehicle, so they want a say in how well — and by whom — it's insured.
Because if your vehicle is stolen, burnt, or written off, the leasing company needs the insurance payout to be reliable and to come through cleanly. Comprehensive insurance is compulsory for a leased vehicle because it is the only cover that pays for own-damage, fire and theft, not just damage you cause to someone else. A leasing company that lets you insure third-party only is taking a risk it usually won't accept, since a third-party policy won't reimburse the outstanding lease balance if your own vehicle is destroyed.
Leasing companies also want their financial interest noted on the policy. This is usually done by listing the leasing company so that any major claim payout is settled with their consent, protecting both your claim and their asset. Ask your leasing officer exactly how they want this recorded before your first policy is issued.
Sometimes, even if you pick the insurer. Several Sri Lankan finance companies run their own insurance broking arm and will place your chosen insurer's policy through that broker rather than you dealing with the insurer directly. This doesn't usually change your premium or your choice of insurance company, but it does mean paperwork and renewals often go through the leasing company's channel, not yours. Others simply ask you to show proof of a valid comprehensive policy from an insurer on their approved list. Ask upfront which model your leasing company uses, since it affects how you renew every year.
Some leasing companies let you finance part of your first year's insurance into the lease facility instead of paying the full premium upfront. As of November 2026, UB Finance's leasing page advertises the ability to include the first year's premium in the facility, up to a limit tied to the vehicle's value — check the exact current limit with the leasing company directly, since limits and terms change. This can ease your cash flow at the time you take delivery, but remember it increases what you're borrowing, so you pay interest on the premium too. Run the numbers on the leasing calculator with and without the financed premium so you know the real difference in your monthly instalment.
You're in breach of your lease agreement the moment your comprehensive cover lapses, even for a day. Most lease contracts give the leasing company the right to arrange emergency or interim cover themselves and bill the cost back to you if you let your policy expire, on top of treating the lapse as a default. A default can escalate quickly under Sri Lankan lease terms, so don't let it get that far. Renew a week before expiry, not on the day it runs out, and keep a copy of the renewal note or receipt in the glovebox along with your revenue licence and CR book copy.
Ask your leasing company which one they require, since this isn't always left to you. Agreed value cover fixes the payout amount when you take the policy, which many lessees find easier to plan around against a reducing lease balance. Market value cover pays out based on the vehicle's value at the time of loss, which can work against you if the market has moved. Either way, confirm it in writing with your leasing company and your insurer before you sign, because this single clause decides what you — or the leasing company — actually receive if the vehicle is written off.
If your situation is unusual — a modified vehicle, an imported permit vehicle, or a leasing company asking for something you haven't seen before — ask fellow buyers and sellers on the Wahanaya forum before you sign anything. And once you've bought or sold through a listing, review our safety tips to avoid common scams around payment and handover.
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