The Insurance Audit

How to complete The Insurance Audit

Insurance exists for events that would financially destroy you, not for annoyances you could cover from savings. An audit means verifying that catastrophic risks — serious illness, disability, death with dependents, your home burning down — are actually covered, while cutting the junk protection that quietly drains money.

1. Gather every policy you have: health, auto, home or renters, life, disability. Note the coverage amount, deductible, and premium for each.
2. Identify what would ruin you: if someone depends on your income you likely need term life around ten times annual salary; if you rent, you need renters insurance; long-term disability is the most commonly missing piece.
3. Compare each coverage amount against the real risk — many people carry too little liability coverage and too much gadget insurance.
4. Get quotes to close each gap; term life and renters policies cost less than most people assume.
5. Cancel or decline coverage for small, affordable losses like phone insurance and extended warranties.

Tips

• With a solid emergency fund, raising deductibles cuts premiums meaningfully.
• Re-shop auto and home insurance every couple of years; loyalty usually costs money.
• Life insurance for someone with no dependents is rarely necessary.

What counts as done

Every major risk is either covered by a policy you can name or consciously accepted — and you can list which is which.