Home Inventory

How to Create a Home Inventory to Help with Insurance Claims

When a hurricane or other natural disaster strikes, a home inventory can make or break your home insurance company's ability to fairly compensate you for your losses. Few people can identify, let alone value, every single item in their homes.

A home inventory keeps track of what you own and how much it's worth.

"Reality does not set in until someone is forced to file an insurance claim." Unfortunately, recalling all of your belongings from memory alone is nearly impossible," says Melton Bennett, president of the American Contents Inventory. "To put it simply, you can't claim it if you can't name it." Insurance does not automatically issue a check for the face value of your policy."

According to the non-profit Insurance Information Institute, a home inventory can help you:

• Get your insurance claim settled as soon as possible.
• Verify your losses for your tax return.
• Keep track of everything you've collected over the years.
• Purchase the appropriate amount of home insurance.

According to the National Association of Insurance Commissioners, nearly half of all Americans do not have a household inventory. Nearly one-third of those who do do not have photos of the items and 58 percent do not have sales receipts.

Experts say that having proof of how much you paid for an item can help you get the most money for it if it's lost in a fire or another covered disaster. You can get the full amount needed to replace a lost item if you have a "replacement cost" policy. However, if your policy is "actual cash value," the value of a lost item will be depreciated.

"Many consumers are unable to recover after a disaster because they are unaware of how depreciation affects their assets." According to Kansas Insurance Commissioner Sandy Praeger, the difference could be thousands of dollars.

Basics of a home inventory

According to experts, creating a home inventory takes little time and is well worth the effort if you ever need to file a home insurance claim. You're more likely to forget some of your possessions if you have to mentally walk through your home and try to recall all of them after your home has been damaged or destroyed.

"One interesting thing I've noticed from my firefighting experience is that people don't always remember everything they own." "Do you know what you have in your house and garage?" Farmers Insurance spokesman Jerry Davies says

According to experts, a home inventory should include the following items:

• A comprehensive list of all of the items in your home.
• Descriptions of each item, including the estimated value and date purchased. Include sales receipts for large-ticket items if possible.
• Each item is photographed.
• A video tour of your property.

According to the Insurance Information Institute, items should be recorded room by room, category by category (such as furniture or electronics), from newest to oldest, or most expensive to least expensive.

"It may appear difficult at first to record information about everything you have in your house," the institute advises.

According to experts, your home inventory should be stored digitally and away from your home. Keep a copy of your inventory on an online data storage service and email a copy to yourself. According to the insurance commissioners group, you should also keep a copy of your home inventory in a fireproof safe or a bank safe-deposit box, and share a copy with your insurance agent.

"If a home inventory is lost in a disaster, it serves no purpose," Davies says.

Use technology to document your home inventory

Fortunately, modern technology makes creating a home inventory easier than ever. Both the National Association of Insurance Commissioners and the Insurance Information Institute provide free smartphone apps to make the process easier. A smartphone can also be useful for filming your belongings.

Of course, you can go the traditional route and write everything down. Most major home insurance companies offer free home inventory booklets. A simple notebook may also suffice. On its website, the National Association of Insurance Commissioners provides a printable home-inventory checklist.

Document everything when conducting a home inventory. Don't overlook items that aren't obvious, such as your grandfather's shotgun, an old wedding gown, or a massive coin collection. Keep in mind that high-value items may necessitate additional coverage.

Your home inventory should be updated once a year and whenever a large purchase is made.