Editor’s Note: This story originally appeared on Living on the Cheap.
It’s not a pleasant topic, but what if your home was damaged, burned or otherwise destroyed, or if your property was lost or stolen? Would you be able to remember everything you had at home? Trying to remember when you bought your TV is the last thing you want to do in the middle of a disaster.
It may seem like an overwhelming and time-consuming process, but try to think about the peace of mind you’ll have once you’ve completed your home inventory. You don’t have to complete everything in a day, a weekend or a week. Even if disaster strikes before you’ve completed it, it’s better to have a partial list than no list at all.
Here’s what you need to know.
What is the purpose of a home inventory and why do I need one?
The purpose of a condition report is to be able to give this document to your insurance company or to use it to create a list of lost items. The reason homeowners have insurance is so they can be reimbursed and as financially sound as possible in the event of a claim.
Having a detailed inventory of everything you own should increase your insurance reimbursement and possibly reduce the time it takes to get reimbursed. You increase your chances of a better refund because you have a list of what you owned and proof that you owned it (photos, videos, receipts). Rather than trying to remember what you had in the middle of a disaster, you’ll have completed it before you take the loss.
The insurance company won’t reimburse you for anything you don’t remember. And according to the Insurance Journal, having a home inventory can “cut the time it takes to process a claim in half.”
What should a home inventory include?
The key to a good inventory is detailed descriptions and information and proof of ownership. A home inventory should be a list of everything you own, along with the date you bought it and financial information, including the purchase price and more.
It should include descriptions, make, model and serial numbers (if applicable) for higher priced items. It should also provide proof that you actually owned the items on your listing. You can accomplish this with photos. If you want to get really thorough, a video of all areas of your home is a great idea.
You should also attach all receipts, purchase contracts and appraisals you have. Try to have as much documentation as possible for expensive items.
The more detailed the document, the more likely you are to recover from your insurer.
Tools for preparing a home inventory
There are many methods to achieve this. Just use the most suitable method for you so that you can complete it and it will be easy for you to update it.
- Encircle is a free app that lets you do a home inventory.
- You can also create a spreadsheet or document for a template that you can customize and store online in the cloud.
- Some insurance companies offer advice on how to build inventory, so you should check with your insurer.
- If tech isn’t your thing, you can write it all down using this template from the National Association of Insurance Commissioners.
Steps to follow
- Start by going from room to room. You might want to tackle one piece a day. You can also enlist the help of other household members to create a preliminary list of their rooms. You can then browse and confirm that everything is listed correctly and add any missing information.
- Take a picture of every wall in every room. Photos (and videos) provide proof that you owned items. You can look at a photo later and notice something you missed on the list.
- Take close-up photos of valuables so it’s clear what they are. Zoom in for serial numbers.
- Label all your photos, either electronically or by printing them out and writing detailed information on each photo.
- You can take videos. Tell the descriptions, price and date of purchase of big-ticket items as you go.
- Don’t forget closets, drawers, hallways, boxes, under beds, behind large furniture, storage rooms, basements, attics, crawl spaces, sheds and garages. Also take photos and videos of these areas. Don’t forget the inside of drawers and cupboards. For expensive items like shoes or clothing, take photos with the tags visible.
- Record the name of each item, describe the item, including make/model (if applicable), condition, purchase price, and date and where you purchased the item. Also record all serial numbers found on all items. For items such as furniture, also include dimensions and materials (for example, an oak desk or a 4-by-6-foot mahogany table).
- If you have receipts, attach them electronically or consolidate all the paperwork.
- If you have a replacement cost policy, you must include replacement cost estimates for each item in your inventory. You can often find this information online.
- Locate receipts. If you purchased valuables online, access your accounts and reprint receipts.
- Work with your insurance agent to make sure your inventory is acceptable and your current coverage is adequate by showing them your inventory. They will also determine if you need an insurance endorsement for certain items such as jewelry, artwork, musical instruments, furs, valuable wine, etc.
- Update inventory whenever you make a major purchase, receive expensive gifts, or move items around your home. At a minimum, update your inventory every year. Keep a file or container and put your receipts in it for major purchases, then return to it periodically and log in with new information. Also take new photos. Then electronically store the inventory.
- A home inventory can be used as a basis for deducting the uninsured portion of a loss from your income tax.
- Update your insurance coverage as needed when adding expensive items to your home.
Storing your inventory
Keep a copy of your inventory, including all backup documents, away from home. Store it on a cloud service like Dropbox or email it if you’re comfortable with that.
If you live in a disaster-prone area, keep a copy in your emergency bug out bag.
Keep in mind that your expensive electronics and appliances may have cost a lot, but the value of your shoes, clothes, coats, dishes, kitchen utensils, bakeware, small appliances, vacuum cleaner, home maintenance equipment yard, tools, books, bicycles, sports equipment, children’s toys, beds, linens, bath linens, home decor, draperies, rugs, furniture, and most likely far exceed the value of your computers, televisions, etc. So don’t skimp on the project, as it could cost you a lot more in the long run.
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