How to Audit Your Family's Insurance Coverage

What No One Told You

Your employer's life insurance is almost certainly not enough

Most employer-provided life insurance is 1-2x your annual salary. Financial planners recommend 10-15x annual income for families with dependents. If you earn $80,000 and your employer provides $160,000 in coverage, you're likely $500,000-$1,000,000 short of what your family would need to maintain their lifestyle, pay off the mortgage, and fund education.

Home insurance doesn't cover what most people assume

Standard homeowner's insurance excludes: floods (requires separate NFIP or private flood policy), earthquakes, sewer/drain backup (available as a rider for ~$50-100/year), home business equipment and liability, and damage from "neglected maintenance." The sewer backup rider is the one most families should add immediately — a single basement flood from a sewer backup averages $10,000-$20,000 in damage.

Disability insurance is the most overlooked essential

You insure your car, your home, and your life. But your ability to earn income — the thing that pays for all of it — is often uninsured. The Social Security Administration estimates that 1 in 4 workers will experience a disability lasting 90+ days before retirement. Employer-provided short-term and long-term disability typically replaces only 50-60% of income. Supplemental disability insurance fills the gap.

You're probably paying for coverage you don't need

Common over-insurance: collision coverage on a car worth less than $5,000 (the premium + deductible may exceed the car's value), extended warranties on appliances, identity theft insurance if your credit card already provides it, rental car coverage if your auto policy already covers rentals. An audit catches these.

🔧 TOOL: Family Insurance Coverage Worksheet

Fill in each section. Mark gaps with ⚠️. Review with your insurance agent or financial advisor annually.

#### HEALTH INSURANCE

| Item | Details |

|------|---------|

| Provider/plan name | |

| Policy/group # | |

| Type (HMO, PPO, HDHP) | |

| Monthly premium | $ |

| Annual deductible (individual) | $ |

| Annual deductible (family) | $ |

| Out-of-pocket maximum | $ |

| Covers all family members? | ☐ Yes ☐ No — Who's missing: |

| HSA/FSA enrolled? | ☐ Yes ☐ No — Balance: $ |

| Dental coverage? | ☐ Yes ☐ No |

| Vision coverage? | ☐ Yes ☐ No |

Gap check:

• ☐ All family members are covered
• ☐ Out-of-pocket max is affordable if hit
• ☐ Prescription coverage is adequate for current medications
• ☐ Preferred doctors are in-network

#### LIFE INSURANCE

| | Person 1 | Person 2 |

|---|---------|---------|

| Employer-provided coverage | $ | $ |

| Personal policy 1 (type: term/whole) | $ | $ |

| Personal policy 2 | $ | $ |

| Total coverage | $ | $ |

| Annual income | $ | $ |

| Recommended (10-15x income) | $ | $ |

| Gap | $ | $ |

Beneficiaries current? Person 1: ☐ Yes ☐ No | Person 2: ☐ Yes ☐ No

#### HOMEOWNER'S / RENTER'S INSURANCE

| Item | Details |

|------|---------|

| Provider | |

| Policy # | |

| Annual premium | $ |

| Dwelling coverage | $ |

| Personal property coverage | $ |

| Liability coverage | $ |

| Deductible | $ |

| Replacement cost or actual cash value? | |

Gap check:

• ☐ Coverage matches current home rebuild cost (not market value)
• ☐ Flood coverage? ☐ Yes ☐ No ⚠️ (separate policy needed in flood zones)
• ☐ Sewer/drain backup rider? ☐ Yes ☐ No ⚠️ (add for ~$50-100/yr)
• ☐ Home office/business equipment covered? ☐ Yes ☐ No ☐ N/A
• ☐ Valuable items (jewelry, art, instruments) scheduled? ☐ Yes ☐ No ☐ N/A
• ☐ Home inventory documented? ☐ Yes ☐ No ⚠️

#### AUTO INSURANCE

| | Vehicle 1 | Vehicle 2 |

|---|---------|---------|

| Vehicle (year/make/model) | | |

| Provider | | |

| Policy # | | |

| Liability (bodily injury) | $/$ | $/$ |

| Liability (property damage) | $ | $ |

| Collision deductible | $ | $ |

| Comprehensive deductible | $ | $ |

| Uninsured motorist | $ | $ |

| Annual premium | $ | $ |

Gap check:

• ☐ Liability limits are at least 100/300/100 ($100K per person/$300K per accident/$100K property)
• ☐ Uninsured motorist coverage matches liability limits
• ☐ Collision still makes sense (car value vs. premium + deductible over 3 years)
• ☐ Rental car coverage — needed? ☐ Yes ☐ No ☐ Already covered by credit card
• ☐ Teen drivers properly listed? ☐ Yes ☐ No ☐ N/A

#### UMBRELLA / LIABILITY INSURANCE

| Item | Details |

|------|---------|

| Provider | |

| Coverage amount | $ |

| Annual premium | $ |

| Do you have one? | ☐ Yes ☐ No ⚠️ |

If no: An umbrella policy provides $1-5M in additional liability coverage beyond your home and auto policies. At $200-400/year for $1M, it's one of the best-value insurance products available. Recommended for any family with assets exceeding their auto/home liability limits.

#### DISABILITY INSURANCE

| | Person 1 | Person 2 |

|---|---------|---------|

| Employer short-term disability | ☐ Yes ☐ No | ☐ Yes ☐ No |

| Employer long-term disability | ☐ Yes ☐ No | ☐ Yes ☐ No |

| % of income replaced | % | % |

| Supplemental policy | ☐ Yes ☐ No | ☐ Yes ☐ No |

| Waiting period | days | days |

| Benefit period | | |

Gap check:

• ☐ Combined coverage replaces at least 60-70% of income
• ☐ Waiting period is survivable with emergency savings
• ☐ "Own occupation" vs. "any occupation" definition reviewed

#### LONG-TERM CARE INSURANCE

| | Person 1 | Person 2 |

|---|---------|---------|

| Policy exists? | ☐ Yes ☐ No | ☐ Yes ☐ No |

| Provider | | |

| Daily/monthly benefit | $ | $ |

| Benefit period | | |

| Elimination period | days | days |

| Inflation protection? | ☐ Yes ☐ No | ☐ Yes ☐ No |

If no policy: Long-term care costs average $6,000-$12,000+/month depending on care level and location. Medicare does not cover long-term care. Options: traditional LTC insurance (best purchased in your 50s), hybrid life/LTC policies, or self-funding. See the paying for elder care guide for a full breakdown.

#### AUDIT SUMMARY

| Category | Status | Action needed? |

|----------|--------|---------------|

| Health | ☐ Adequate ☐ Gap found | |

| Life | ☐ Adequate ☐ Gap found | |

| Home/Renters | ☐ Adequate ☐ Gap found | |

| Auto | ☐ Adequate ☐ Gap found | |

| Umbrella | ☐ Adequate ☐ Gap found | |

| Disability | ☐ Adequate ☐ Gap found | |

| Long-term care | ☐ Adequate ☐ Gap found | |

Date of audit: _______________

Next review date: _______________

Insurance agent contact: _______________

Common Questions

How often should you review insurance coverage?

Review all insurance policies annually — January is a natural time since many policies renew in Q1. Additionally, review after any major life event: marriage or divorce, birth or adoption, home purchase or sale, significant salary change, job change, or a child reaching driving age. Each of these events can create new coverage needs or make existing coverage inadequate.

What insurance do most families forget about?

The three most commonly overlooked insurance products for families are: umbrella liability insurance (provides $1M+ in additional coverage for $200-400/year), disability insurance (protects income if you can't work — 1 in 4 workers will need it), and sewer/drain backup coverage (a rider on home insurance costing $50-100/year that covers a $10,000-$20,000 average damage event). Most families also underestimate how much life insurance they need, carrying 1-2x salary when 10-15x is recommended.

What This Looks Like When It's Working

The family that's done this audit knows exactly what's covered, what isn't, and what it costs. They review it every January. When a life event happens — new baby, new home, new job — they update the relevant policies because they have a system, not a stack of forgotten paperwork.

Families who stay on top of this keep their policy information, agent contacts, and coverage summaries in a shared family hub. Kinstone gives families a place to store insurance details alongside financial records, legal documents, and emergency contacts — so when a claim happens or a review is due, everything is in one place.