Tackle this Task Right After the New Year to Protect Your Property

No one likes to think about the possibility of fire, flood, storm damage, or theft. But should such a disaster occur, you’d need to provide your insurance company with a detailed list of your belongings in order to be reimbursed for lost or damaged items. Without a home inventory prepared in advance, that list would need to be pieced together from memory. In the stressful aftermath of a disaster, could you count on your memory to recall what items have been lost and what they were worth? If not, you’ll likely get less compensation than you deserve.

Now’s the time to compile that essential inventory so you can start the year with a greater sense of security that your personal property will be protected. Here, answer to all your questions about a home inventory—and helpful pointers on how to get it done.

Do You Really Need a Home Inventory?

It’s fairly easy to remember large items, such as big screen TVs and the grandfather’s clock in your living room, but could you name every necklace in your jewelry box without looking? If you had to list all your valuables after a natural disaster or property crime, it’s likely you wouldn’t remember all of them. And once you accept reimbursement from your insurance company, you can’t make additional claims.

In addition to helping you file a claim that truly reflects the value of your property, a home inventory can be instrumental in obtaining more insurance coverage. If you collect original art, for instance, the value of your collection may well exceed your policy’s coverage limit for personal belongings. In that case, your home inventory can serve as evidence of the value of your collection, and you’ll be able to purchase a rider to your policy that specifically covers the art at a higher reimbursement value.

What Should a Home Inventory Include?

Just because your homeowners’ or renters’ insurance policy lists a maximum coverage amount for personal belongings, that doesn’t mean you’ll receive that amount after a loss. The reimbursement you receive depends on your ability to prove what items you owned, so in addition to a list of appliances, electronics, jewelry, and other valuables, you should briefly describe each individual item, including identifying the model and/or serial numbers as well as estimated value. To establish value, the inventory should include the original receipt or a copy. (If you file original receipts with your income tax papers, a copy should be kept with your home inventory.) Finally, a photo of each item should be included with the inventory as well.

When Should You Compile an Inventory?

January is the ideal time to create or update your home inventory. The excitement of the holidays will be over yet you can still easily locate receipts from big-ticket purchases—many of which are made between Black Friday and Christmas. Get in the habit of addressing your home inventory needs every year at this time, and you’ll be protected in the event disaster strikes.

What Format Options Are Available?

The traditional method of creating a home inventory is to make a list of all your belongings on paper, supplementing it with photos, videos, valuations, and receipts. Because you’ll need access to the information in the event that your belongings are destroyed or stolen, if you choose to go this route, it’s wisest to store the inventory documents outside your home in a safety deposit box. A fireproof, waterproof home safe might keep the inventory intact through a natural disaster, but if the lockbox is stolen you’d be out of luck.

Today’s technology offers another format for a home inventory that may be simpler to compile and safer to store. Mobile apps such as Sortly, which may be available for both iOS and Android devices, let you record each item’s photo, serial number, and purchase date, as well as add a description and a picture of the receipt. Best of all, your home inventory can be stored in a Cloud-based file, such as Dropbox. In addition to general home inventory apps, you may be able to use an insurer-specific app, depending on the company you’re insured with. Apps are available from major insurers, such as American Family and Allstate. Check with your insurance agent to see if they have a free home inventory app you can download.

What’s the Best Way to Take Inventory?

The rule to remember when making a home inventory is: If it’s in your house, it has value. To make your home inventory, go room by room and detail all the belongings therein. If you’re including a paper copy, consider using a home inventory form, such as this one from Allstate. Your insurer can also provide a free form on request.

• Start on one side of a room and systematically work your way around until you’ve documented every item in the room.
• You need not document perishable food items and short-term supplies, such as pencils, paper, rubber bands, and other items that are used up quickly.
• Photograph each wall in every room for item location purposes.
• Take multiple photos of expensive items, such as computers, and when possible, get close-up shots of model numbers and serial numbers.
• Open drawers and closets and document their contents.
• Go through bookcases and jewelry boxes.
• Take close-up photos of receipts, or keep them with your inventory.
• When a receipt isn’t available, document the year the item was purchased and its original cost.
• Don’t overlook ordinary household items, such as pots, pans, and dinnerware. In the case of a fire, these items will all have to be replaced and that’s what insurance is for.
• Off-site items count, too. If you’re renting a storage locker, document all the items inside.
• Consider making videos to supplement your inventory. Make a separate video for each room, describing the contents of the room as you go. A video isn’t essential if you’ve documented every item, but it can serve as a helpful supplementary tool when making a claim.
• Pace yourself so you don’t get overwhelmed. Allow one or more weekends to get through it all.

When Should a Home Inventory Be Updated?

Hold onto receipts from all major purchases you make throughout the year and update your home inventory annually, preferably around the first of the new year. Updating includes taking new room photos if you’ve moved items, in addition to recording new purchases and gifts. If the estimated value of your home inventory exceeds the maximum amount your insurance policy allows, contact your insurer and have your policy updated to reflect the additional value.