Most clients bought their home and auto coverage themselves, years ago, from a captive agent or a website. It auto-renews. Nobody reads the declarations page. Meanwhile the house appreciated, a kid started driving, the garage gained a boat, and the client joined a nonprofit board. The policies stayed frozen while the life they cover kept moving.
That drift matters to the plan, because a single uncovered liability event can undo more than a bad market year. The advisor's job here is not to sell any of it. It is to catch the drift. The checklist below is the pass we run when an advisor sends us a client's declarations pages, and it works just as well as an agenda item in an annual review.
Homeowners: check what the policy assumes
- Dwelling limit versus rebuild cost. The limit should track what it costs to rebuild, not the market value. Construction costs have moved faster than most policy limits; ask when the limit was last updated and whether extended replacement cost is on the policy.
- Flood and earthquake. Both are excluded from a standard homeowners policy. If either risk is real for the property, coverage is a separate policy or endorsement, not a bigger limit.
- Water backup and service lines. Two inexpensive endorsements for two of the most common uncovered claims.
- Sub-limits on valuables. Jewelry, art, watches, and collections carry category caps, often a few thousand dollars. Anything meaningful should be scheduled at an appraised or agreed value.
- Business activity at home. Homeowners policies exclude most business exposure. A home office is usually fine; client meetings, inventory, or a short-term rental usually are not.
Auto: the liability side is the plan's side
- Liability limits sized to assets.State minimums protect the state, not the client. Limits should be high enough to matter, and high enough to meet the umbrella carrier's underlying requirements.
- UM/UIM that matches. Uninsured and underinsured motorist coverage is the part of the auto policy that protects your client rather than the other driver. It is routinely left at a fraction of the liability limit.
- Deductibles versus emergency fund. For a client with real reserves, raising deductibles is often the cleanest premium lever, and it discourages the small claims that hurt insurability.
- Every driver listed. Household members who drive, including the new sixteen-year-old, need to be rated on the policy.
Umbrella: the layer most audits exist to find missing
- Does one exist at all? Still the single most common finding.
- Limit versus the balance sheet. Rounding net worth up to the next million is a floor, not a ceiling. Future income is reachable in a judgment too.
- UM/UIM endorsement on the umbrella. Some carriers will extend uninsured motorist protection above the auto policy. Without it, the umbrella protects others from your client, but not your client from an uninsured driver.
- Underlying limits meet requirements. If the home or auto limits fall below what the umbrella requires, the client pays the gap personally before the umbrella responds.
- Everything scheduled. Rental properties, watercraft, and recreational vehicles only get umbrella protection if the underlying policies and the umbrella both know about them.
Re-run the audit when life changes
An annual pass catches slow drift. These events deserve an immediate look: a renovation or addition, a teen starting to drive, a home converted to a rental, new jewelry or art, a nonprofit board seat, a significant liquidity event, and retitling the home into a trust or LLC. That last one is often advisor-initiated, and the policy's named insured needs to follow the deed.
Claims discipline belongs in the audit
Property carriers price on claim frequency, and claims history follows the client in the CLUE database for up to seven years. Two small claims in a short window can trigger a non-renewal even when neither was the client's fault. A useful rule for clients with reserves: the policy exists for claims that threaten the plan, not for claims the emergency fund can absorb.
When to bring us in
Send us the declarations pages and we will run this audit for you, under NDA, with a plain-language read back: what is fine, what has drifted, and what is worth re-shopping. Coverage that checks out stays exactly where it is.
