An umbrella policy from The Ryan Insurance Agency protects your financial security by providing significant liability coverage. Your home policy provides a tiny bit, typically about 10 to 20 percent of the value of your Clarkston, MI home.

Adding umbrella coverage to that costs little. A million-dollar policy only costs a few dollars per month.

Why does it increase in importance to add this coverage as you age, though?

If you incur liability at a young age, let’s say 30 years old, and have no coverage, you will have to pay out of pocket for the settlement. Perhaps you had paid into an individual retirement account (IRA) since graduating college at 22 years old. The court could force you to pay a settlement using your IRA funds.

At 30, you have 35 years until the typical retirement age to replace the funds you amassed in those eight years. You can fund the account to the maximum amount each year and make up the settlement relatively quickly.

If you had umbrella insurance, it would have paid the entire settlement after your home insurance exhausted its 10 to 20 percent. Let’s say that the same event happens when you reach the age of 60. The court finds you at fault for an accident and must pay a settlement. You withdraw from your IRA to pay it off.

Unless you want to delay retirement, you have five years to fully re-fund your IRA. That could be much tougher, depending on your situation and way of life.

Umbrella insurance covers a long list of issues that involve liability, from an auto accident you cause to someone slipping on wet cement on the lip of your home’s swimming pool.

Depending on the type of vehicles involved, the average personal injury auto accident costs the at-fault party between $41,783 and $62,564. Imagine paying that out of pocket at any age, and you quickly understand the importance of umbrella coverage.

Contact The Ryan Insurance Agency, serving Clarkston, MI, to obtain an umbrella policy to protect your financial security.