Is a Home Inventory Necessary?
Simply put “Yes.”
Insurance agents get asked this question all the time. Typically, it’s asked with a skeptical tone, as though the insurance company might try to pull a fast one at claim time by not coughing up enough cash to cover the loss.
You do not need to provide a list or inventory to purchase a policy, but you must furnish one in the event of a property damage claim. Either way, it is highly recommended that you create a list of your contents early and update it often, unless you want to be at the mercy of a claims adjuster. And while photographic evidence of your home’s contents is not required for a claim, it’s a smart move to do so to ensure proper reimbursement. Just don’t try to collect for your 18 karat gold toilet plunger, you may be asked to show proof of that particular purchase.
Why Make an Inventory?
Real quick, grab a pen and piece of paper. Now write down all of the contents of your smallest closet. When you have finished, go into that closet and see just how many things you missed. Those are the items the insurance company will not pay you for in the event your home burns down and you are asked to generate an inventory. Now imagine making that list from a hotel room after your home was destroyed by a tornado or hurricane! The longer it takes for you to generate the list, the longer you will wait for your claim to be paid. Why pay for the insurance if you are not properly prepared to use it in the event of a loss?
Remember, once you accept the settlement offer from your insurance company, your claim is closed. There are no do-overs, no adjustments. You cannot go back three months later when you realize your forgot to inventory your silverware or china and ask for a larger check.
How Do I Create an Inventory of My Contents?
There are a number of options to document the items you own:
1. Make a List: You can prepare a good old-fashioned hand-written list of your items. Go room to room and write down your property. This may include taking down serial numbers and possibly the year, make and model of some items. You may also want to provide a value for each of the bigger ticket items. Don’t get carried away with small stuff. Make certain to store this “master” list off-site. A safe deposit box at your local bank is a good option. A digital copy is also recommended. Scan and upload it to your email account. This way, you should be able to access it from any computer. Leaving the list in your home is a bad idea. It won’t do you much good if it is destroyed in the same event that destroys your property.
2. Take Photos: Take pictures of your home’s contents if you are not a list writer. Preferably, take digital photos. Then upload those digital photos to your email account or put them on a cd in your banks safe deposit box. Whatever you do, do not leave the pictures on your camera/cell phone. You will run the risk of losing the images if your camera/cell phone is lost or damaged.
3. Shoot Video: Pictures are worth a thousand words. If you choose to shoot video, be sure to discuss the items you are looking at, providing the serial numbers, purchase date and value as you go. As with option “2,” make sure to upload the digital video to an email account or keep a copy of the file in the safe deposit box at the bank.
4. Hire a Professional: Pay someone to do all of this for you. There are companies who will perform this service for you. You can expect them to complete all of the main steps listed above. Typically, there is a cost for the service and a smaller annual fee each year to continue the storage of your information.
Remember, it is not necessary to write down every single pair of socks. You simply want to be able provide your insurer with a relatively detailed estimate in a very short amount of time.
What About High Dollar Items?
If you have items of higher value, such as jewelry or firearms, you should consider “scheduling” those items on your homeowner’s insurance policy.
“Scheduling” your contents means listing the items on your policy separately from the general contents coverage amount. You may be required to have an appraisal done for each one of the expensive items. A copy of each should then be provided to your insurance company.
At the end of the day it is a good idea to have an inventory of everything you own, whether you need it for insurance purposes or just to be aware of your personal belongings and/or personal finances, a home inventory can prove to be invaluable.