Coverage Calculator
Underinsured, Overinsured, or Right on Target?
Coverage adequacy is a moving target — a policy that matched your needs five years ago may no longer reflect your current income, assets, or dependents. This calculator reduces the question to its essentials: what you estimate you need against what you actually carry, and the dollar gap between the two.
The Formula
Coverage Gap = Needed Coverage − Current Coverage
A positive gap means you're underinsured by that amount; a negative gap (current coverage exceeds need) means you're overinsured; a gap of zero means your coverage matches your estimated need exactly.
Interpreting the Result
| Gap Value | Status | What It Means |
|---|---|---|
| Gap > 0 | Underinsured | You have a shortfall; consider increasing coverage by the gap amount. |
| Gap < 0 | Overinsured | You may be paying for more coverage than your estimated need requires. |
| Gap = 0 | Adequately Insured | Current coverage matches the estimated need. |
Where This Matters
- Annual policy reviews — a quick way to check whether last year's coverage amount still fits this year's circumstances.
- After a major purchase or life event — a new mortgage, a new dependent, or a paid-off loan all shift the "needed coverage" side of the equation.
- Comparing across policy types — use it for life, disability, liability, or property coverage by feeding in the appropriate need and current-coverage figures for each.
How to Use This Calculator
- Enter your estimated needed coverage amount (from a needs analysis, such as the income-replacement method).
- Enter your current coverage amount, as shown on your existing policy declarations page.
- Select Calculate to see the gap and whether you're underinsured, overinsured, or adequately covered.
Related Calculations
Estimate your needed coverage first with the Life Insurance Calculator, or check broader liability exposure with the Umbrella Insurance Calculator.