How to Create a Home Inventory for Homeowners Insurance
A home inventory is a comprehensive list of the items in your home. Creating a home inventory is an important task to complete in case you need to file a claim for lost or damaged items within your home. Home inventories are not just for those who own “traditional” homes either. Every insured homeowner, condo owner, or renter should create a home inventory list. In 2017, 6% of all insured homes filed a claim, but only about 50% of consumers said they had created a home inventory beforehand. People who do have one usually experience a smoother claim-filing process.
What to Include in Your Home Inventory
- Detailed descriptions
- Receipts with date, location, and amount of purchase
- Serial numbers, model type, and manufacturer
- Current monetary value of items, including any updates and appraisals
Why Should I Create an Inventory?
Whether you rent or own your home, an inventory of your possessions will help you purchase the correct type of insurance coverage and set the right limits for personal belongings coverage. It will also simplify your claim filing process if you do need to file a claim.
Understanding exactly how much your personal items are worth will allow you to make a more informed decision about which policy is appropriate for you and your specific needs.
Many people wonder if their home includes enough items to necessitate a home inventory. You’d be surprised, though at how much money your items are worth. Pick any room in the house and begin to add up how much everything cost you. You’ll see!
What Items Should I Put on My Home Inventory?
You should include anything on your inventory that you would seek reimbursement for from your insurance company if it was destroyed or damaged. Any list is better than having no list at all, but the more detailed and extensive your list, the better likelihood of fast and full reimbursement from your insurance company. Right now is a great time to search for a homeowner insurance policy and begin a conversation about your home inventory with a qualified insurance agent.
How Do I Create a Home Inventory?
There are multiple ways to create a home inventory, including hand-written lists, photographs, video footage and online apps. Most people use a combination of the above methods to create the most complete home inventory possible.
A home contents inventory worksheet is a great place to start if you want to make a visual and organized list of everything you own before you begin digitally archiving specific items. Filling in this worksheet has the added benefit of helping you to avoid missing items you may otherwise overlook, as well as assisting in breaking the inventory process into categories of items.
Photographs are helpful for capturing footage of serial numbers and creating digital copies of receipts. Photographs can also provide snapshots of entire rooms and drawers. For a more valuable item it may help to have multiple pictures to provide in case of a claim.
Videos should be of each separate room, and may be more convenient for larger collections such as a wine cellar or sets of dishes. An added benefit of recording videos for your home inventory is the audio. Audio allows you to easily record detailed descriptions of items without having to pause and write or type descriptions as you go through each space.
When Should I Create My Home Inventory?
The best time to create your home inventory is as soon as you move in. Also remember that this is a living, breathing list that will grow as you buy more things. Experts warn against waiting to create an inventory until you need to file a claim, as much of the information necessary may have been damaged or destroyed.
For instance, if you lost your possessions in a fire, you likely would have lost your receipts along with the item. The photographic evidence that aids in the claim process also likely would not exist if your item was lost or stolen.
Being prepared and organized is beneficial for emergency situations; the stressful mindset that accompanies losing important items is not ideal to creating an inventory. During an emergency, the last thing you want to do is attempt to scramble together lists of your possessions without any substantiating evidence available. The best time to begin your home inventory is now, and beginning it with a clear head will make the process much less stressful. Get a policy quote online and begin your inventory today!
How Do I Start My Home Inventory Process?
Ideally, when you move into a new residence, you should set up your home inventory as you unpack. Even if you wait until later, the Insurance Information Institute recommends two different methods for creating your home inventory. One method is to start with a smaller room, such as a closet or bathroom and work your way through the larger, more crowded spaces in your home.
Remember to include items in attics, detached structures and garages. Another option is to start with your most recent significant purchases and work your way backwards until you’ve inventoried all of your possessions reverse chronologically.
For clothing items, your descriptions can be broader, for example “two dresses, four jackets.” Unless the clothing item is particularly valuable, grouping items can be helpful in keeping your inventory list focused and concise. This description approach could also be helpful for inventorying kitchen utensils, CDs or other larger collections of lower value items. Items that are stored off-premise from your property, such as in a self-storage facility are also covered.
You should explicitly understand the types of loss or damage policy coverage for your items, ranging from damage caused by fire, hurricane, vandalism or theft. It is important to note that different insurance policies provide different coverage, including special limits on reimbursements.
Once you’ve created your inventory, it is important to remember to add new purchases to it, especially if they are significant purchases. Getting in the habit of recording new items will keep your inventory up-to-date, and increase your likelihood of reimbursement if you ever file a claim. Aim to do a full comprehensive review of your inventory and home insurance coverage annually.
What About Very Expensive Items?
If an item is antique, a collectable, or irreplaceable, you should consult with your insurance agency representative about how to properly input them into your home inventory. You should also inquire how or if these more expensive items would be reimbursed in a claim. Expensive items to pay extra attention to include but are not limited to: jewelry, art, or furs.
You should always check with your insurance company regarding higher value items because there is a monetary limit on how much your insurance will reimburse. The most cost-efficient option is to raise your liability limit, however both individual and comprehensive losses will still have specific reimbursement limits.
Another option is to purchase a floater policy and “scheduling” individual items. Floaters must be professionally appraised. Although the latter option is more expensive, it will cover loss of any type including accidents you are at fault for, such as damaging or losing your valuables.
Where Should I Store My Home Inventory?
Keeping copies of your home inventory accessible outside of your home is imperative in the case of an emergency. Without the ability to access your home inventory it is rendered useless.
You could easily lose the laptop, phone, or hard copy of your inventory in a natural disaster or robbery. It is a good idea to store at least one extra copy of your inventory off site from your property. Some secure spaces to store copies may include your office, inside a safety deposit box, or with a trusted loved one.
Some people choose to keep their inventory on a secure cloud file system so that their inventory is accessible from any location with internet service, provided the person accessing it has the proper credentials to do so.
Experts stress security of your inventory, as it could be disastrous in the wrong hands. Avoid putting your home address on the inventory or any identifying information. In the case of your incapacitation due to injury, your inventory should be accessible to a trusted adult in your life who lives outside of your home.
You may also email your insurance agent a copy of your home inventory. Doing so creates an opportunity to request feedback on your home inventory, and ask if your current home insurance coverage is sufficient for the items included in your home inventory.
How Does My Home Inventory Help With My Claims Process?
Each insurance company has a specific claims process, so it is important to reach out to your insurance company to ensure you are providing them with the documentation necessary to begin your claim. After providing your home inventory, your insurance company will need to review all of the submitted information. Once you receive the reimbursement offer from your insurance company, you should review it carefully.
What Is Actual Cash Value vs. Replacement Cost?
Insurance companies may choose to pay actual cash value or replacement cost. The actual cash value is the depreciated value of an item at the time of loss, while the replacement cost provides payment equal to the cost of replacing the lost item.
If you are receiving the actual cash value, you may be asked to sign paperwork that indicates your agreement with the settlement before receiving your payment. For replacement cost basis compensation, your first check will be the actual cash value. You can then expect to receive reimbursement for expenses incurred while you are replacing the items. Outside of some very specific exceptions, you must replace the item you lost before you are able to collect your full replacement cost basis settlement. These exceptions are usually within high-end policies that are more expensive and cover very valuable items.
If an item can be repaired an insurance company may offer to repair it instead of replacing it. If your item is no longer available, then you should do your best to find the product that is most similar. You may be able to negotiate compensation during the settlement process by doing independent research and sharing it with your adjuster. By providing your home inventory documentation and keeping an open and consistent line of communication with your insurance adjuster you will greatly improve the likelihood of an agreeable settlement.
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