The concern of the adequacy of coverage is centered on how well the insurance policies protects the assets of the insured against unforeseen losses. For the evaluation of the adequacy of your insurance coverage, various loss scenarios must be considered and judged accordingly to your insurance deductibles and limitation.

The adequacy of coverage's concept is subjective, and mostly depends on an individual's propensity to collide with risk rather pay larger insurance premium. An individual's ability to absorb losses must also not be taken aside because an individual who has a very few liquid assets cannot pay huge deductibles or maintain other uninsured losses. As an alternative, those individuals who possess substantial assets may choose to acquire higher limits to their coverage to prevent a lost of their hard earned wealth.