So, you don't own a car and you're trying to buy an umbrella policy, but the insurance company says you need an auto insurance policy first. What do you do? You need to get non owner auto insurance.
Let's run through some basics first so this all makes sense, then we'll tell you specifically what you should do.
What is an umbrella policy?
Umbrella policies provide insurance coverage at higher limits than auto and renters or homeowners policies prove, often up to $1M, $2M, $3M, or $5M. By contrast, most car and home insurance won't provide coverage above $300,000 or $500,000.
Umbrella policies sit over car and homeowners (or condo or renters) insurance, just like, well, an umbrella. Here's how they work: in a big accident where you're found responsible, your home or auto insurance will pay up to the limit of that policy. Your umbrella policy will then pay the amount over that limit, up to the limit on the umbrella coverage.
Umbrella insurance also offers a few coverages that don't exist within car or home insurance. These can include coverage for slander and libel or false imprisonment, or additional coverage if you own a home or condo you rent out. Umbrella policies can also sit above boat policies if you're a lucky boat owner. Check with the company you're buying your umbrella from for an exact list of coverages.
Why do people buy umbrella insurance?
The reasons people buy umbrella insurance include:
- They have a lot of assets.
- They expect to earn a lot of money in the future.
- They want to feel more protected.
People with more assets or a career that will lead to big paychecks in the future are more often targets of lawsuits after an accident. Umbrella policies are relatively inexpensive for a lot of coverage, so they make sense in those cases. And some of us just like to feel safe. Nothing wrong with that!
How much does an umbrella policy cost?
Umbrella policies are pretty inexpensive, often costing $200-$500 per year for policies that offer protection up to $1M or more.
Why do I have to have car insurance to buy an umbrella policy?
Driving a car is much more likely to result in a very large claim than anything else most of us do. Since umbrella policies sit over your auto insurance and home (or renters) insurance, the companies that write umbrella want to make sure there's an auto insurance company that can manage the claims process and settle your claim if possible. That keeps the umbrella insurers from having to work through the complex claims process, which they are not experts at. Also, if a large claim can be settled fairly and quickly by experts, the umbrella carrier may not have to pay out at all.
Why do I have to have car insurance to buy an umbrella policy if I don't own a car?
Even for people who don't own a car, occasional driving is the most likely activity in their life to cause a large accident they are legally responsible for. And if they didn't have any kind of auto insurance, the umbrella carrier would be left managing the claims process for an auto claim, which they don't have the expertise or staff to do. That's why they usually insist you have a non owner auto policy if you don't own a car and want to buy an umbrella policy.
What do I do if I want an umbrella policy but I don't own a car or have car insurance?
If you want umbrella coverage but you don't have a car, you need to buy a non owner car insurance policy. You'll want to check what liability limits your umbrella insurer requires on the nonowner car coverage, usually $100,000 per person/$300,000 per accident or $250,000 per person/$500,000 per accident.
Finding an insurance company that offers non owner auto insurance at all, and at high enough limits, can sometimes be difficult. It's worth asking if your umbrella insurer can do it. Otherwise, call around to the big insurance companies in your state, or a local agent. Or, of course, call us here at Surround - we're non owner auto specialists! If you have a good driving record, you can typically expect to pay between $300 and $1500 a year, depending on where you live and, in states that allow it, your credit score.
What kind of non owner car insurance will an umbrella insurer count as car insurance?
For a personal umbrella, non owner car insurance with limits of $250,000 per person and $500,000 per accident should pretty much always be enough, though some umbrella carriers will accept coverage at $100,000/$300,000.
How do I buy a non owner auto policy?
Non owner auto insurance often isn't quoted online, so you'll probably have to call your local insurance agent, or call around to insurance companies until you find one that sells non owner insurance in your state. (Or, at risk of repeating ourselves... just text, call, or email Surround...).
What do I need to get a non owner car insurance quote?
To get a non owner car insurance quote, you'll typically need your drivers license number and a list of any accidents or driving violations you've been involved in over the past few years. You'll also need to drive truly occasionally and not have access to a vehicle you use with any regularity. If your spouse or partner is going to be on the policy too, you'll need the same information for them.
Once you get your quote and are ready to pay, most insurers will accept credit cards, debit cards, and ACH payments direct from your bank account. Check on the fees, though - they'll likely be different for different payment methods.
How do I prove I have auto insurance to my umbrella insurer?
You can send a copy of the declarations page of your auto insurance or non owner auto insurance policy to your umbrella insurer to prove you have car insurance. You should receive a declarations page and your other policy documents right after you make your down payment on your auto or non owner auto insurance.