If your entire home burned to the ground tomorrow, would you be able to recount all your possessions? The reality is, when disaster strikes, we often get little or no warning. In the event you should fall victim to fire, theft, or violent weather, your homeowner’s insurance company will expect documentation to provide compensation or replacement of lost assets. Just a policy is not enough.
Why Create A Home Inventory?
A home inventory will help you:
- Validate that you have adequate homeowner’s insurance coverage to replace what you own.
- Obtain personal property endorsements on your policy for high-value items like precious jewelry, silver, original art, tools, firearms and special collectibles.
- Provide documentation of your personal belongings to insure you receive compensation for everything your home insurance policy covers.
- Store receipts to document the original purchase price of items so you know what it will cost to replace them.
- File an accurate and comprehensive insurance claim to allow for prompt settlement and reimbursement.
- Provide the police a record of model and serial numbers to increase your chances of recovering any stolen property.
- Keep records to substantiate losses you may write off on your federal income taxes.
Setting Up Your Personal Property Inventory
You can prepare your home inventory on paper by hand or on the computer, but you may find it easier to store and keep up-to-date in digital format. The Insurance Information Institute (III) web site has some great information and tools available to simplify the process.
To prepare a listing by hand or by computer spreadsheet, download the III’s home inventory lists; the items are listed by room or grouped together by category so you don’t omit anything you should include in your inventory, including items in your garage, outdoor rooms, or on the porch or patio.
If you’re technically savvy, download a free home inventory software program also available on the III web site. The program’s wizard function asks questions and steps through the process of setting up your inventory structure by room. You can upload both photos and scanned receipts to be stored with the items list data.
How to Conduct a Home Inventory
- Go room by room, recording items to be included in your inventory.
- Make note of your big-ticket items, and keep detailed records of their original cost and value. If you don’t know their current value, consider having them appraised. Your valuables may require additional insurance coverage.
- List ALL the items in your rooms, including contents of closets, drawers and desks – even the small stuff. You can be more general in your descriptions of these items than you are for more valuable possessions: (4) pairs of jeans, (6) collared shirts, (10) pairs of dress socks, (50) hardback books, etc.
- Photograph your possessions. With a digital camera, you can store images on your computer, burn them on a CD, and digitally link them to an item in your digital home inventory. But traditional photo prints will serve the purpose as well; store prints (or a photo CD) in your safety deposit box with a copy of your completed home inventory. For items like designer clothing and suits, take individual photos and a close up of the labels. For big ticket items like electronics, take a close up of the model and serial numbers if possible.
- If you have a video camera, or access to one, use it! Conducting a walk-through of your home will save time, especially documenting smaller items in your home. Open drawers and closets and describe your belongings. Narrate as you videotape your home and possessions.
- Take wide-shot photos of your home’s exterior and all interior rooms. If you make improvements to your home, the photos will serve to document any added value.
Update your home inventory every six months to a year or when you add any big-ticket items (like after the holidays). Hopefully, you’ll never have cause to need it. But if you do, it will be worth every second you spend on it.
Sources: Insurance Information Institute (www.iii.org), knowyourstuff.org, allstate.com
What to Include in a Home Inventory
Record for each item of value:
- Complete description
- Brand/model/serial number
- Current condition of the item
- Original purchase price
- Date/Place of purchase
- Estimated value/date
Keeping detailed records or receipts is vital to determine what it will cost to replace the item or its closest equivalent at the time of the loss.
"A complete inventory…may be one of the most valuable investments for peace of mind anyone can make for themselves and their families."- Dennis Kizziash, acting director for FEMA’s Transitional Recovery Office in Mississippi.
This information is general in nature and should not be construed as tax or legal advice. INVEST Financial Corporation does not provide tax or legal advice. Please consult your tax and/or legal adviser for guidance on your particular situation. The information in this report has been obtained from sources considered to be reliable but we do not guarantee that the forgoing material is accurate or complete. This article is not an offer to sell or a solicitation of an offer to buy any security, and may not be reproduced or made available to other persons without the express consent of INVEST Financial Corporation. Securities, advisory services and insurance products offered through INVEST Financial Corporation, member FINRA, SIPC, a Registered Broker Dealer and Federally Registered Investment Adviser, and affiliated insurance agencies. 0812-84177
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