How a Home Inventory Can Help Protect Your Property – Robb Report
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You buy home insurance to protect your investment in your property in case the unthinkable happens.
Imagine that your house is set on fire and you have to replace everything yourself. Could you list everything in your house when filing a claim? Most likely not, especially when you are upset by the circumstances.
We all hope a day like this never comes, but if it does, there is one way to prepare ahead: have a home inventory.
Having a home inventory will simplify the claims process. And it will help you maximize your claim so that you get everything you are entitled to. If you forgot any part of what you own, you won’t claim it.
An inventory can also help you choose the right amount of coverage for your property when you buy or renew your home insurance policy.
Here are some things to consider when taking inventory.
What should I include in a home inventory?
Simply put, include all of the assets that are in your home. You not only need a list of items, but you should also include this information when possible:
- The date you purchased the item
- Serial numbers
- An estimate of the item’s value
- A description of each item (with details of the make and model if you have any)
It’s unrealistic to assume that you have receipts for everything in your home, but keep receipts for large or expensive items when possible.
For some items like clothes, you can indicate the number and the estimated value. For example: 12 dresses, 20 shirts and 10 pairs of shoes.
Remember to take an inventory of any assets you store elsewhere, such as a storage facility. If the installation is destroyed, you will need a complete list of what you have lost.
How to create a home inventory
Before you start emptying cupboards and drawers, decide how you are going to record your home inventory. Here are the possibilities:
- Written list. You can start a written list from scratch, and some insurance companies offer inventory checklists to help you sort through your stuff.
- Video recording. You can record video of all your assets. If video isn’t your thing, you can take a series of photographs to document your assets. Remember to take pictures of the items in all of your drawers and closets.
- Home inventory application. Many free applications are available such as Allstate digital locker, BluePlum house inventory, Circle the house inventory and Inventory of the magic house. These apps help you easily register your assets.
Using a spreadsheet to organize a written list can make the process less overwhelming. To start:
- Divide your list into specific pieces. Start with a room such as your kitchen and list everything in that room. You must include appliances, cooking utensils, utensils and dishes. Open drawers and cabinets and save everything.
- Separate items into categories. Another option is to organize the items into categories, for example, furniture, antiques, jewelry, and other sundries.
- Associate your list with photos and videos. You may want to take a photo of the serial number of each item if possible.
Store and keep your inventory list safe. No matter how you choose to take your inventory, you want to keep it safe. After all your hard work, it would be terrible to see it destroyed by fire or water. Store your documents in a fireproof safe, vault, or the digital cloud.
How do I know if I have enough home insurance?
Check your home insurance policy for your personal property coverage limit or call your home insurance agent for help. The limits for personal property are usually between 50% and 70% of your home’s coverage. If you have $ 500,000 coverage for your home, you could have coverage of $ 250,000 to $ 350,000 for personal property.
Standard home insurance policies set coverage limits for certain items such as jewelry and watches theft.
You can add additional coverage for property. If you find that the value of your belongings exceeds the limits of your policy, you can usually purchase additional coverage for personal property. For high value items like expensive jewelry, consider “planning” the items so that they are insured for their full value.
You may need to purchase separate policies to cover certain natural disasters. Another point to consider is that home insurance policies do not cover damage caused by floods or earthquakes. If you live in an area prone to these disasters, consider purchasing flood insurance and / or earthquake insurance.
Look for replacement cost coverage. Consider a home insurance policy that covers the replacement cost instead of the actual cash value. With the actual cash value, your insurer will only reimburse you for the value of the property less depreciation. Selecting replacement cost coverage means you will be reimbursed for the cost of new, similar items.
Ashley Kilroy is a personal finance writer and content creator. In addition to being a writer at Forbes, she writes for solo entrepreneurs as well as Fortune 500 companies.