Do you have enough homeowner’s insurance?
Everyone has some possessions they consider irreplaceable – be it family heirlooms or photographs, jewelry, memorabilia, financial documents, and other valuables. But the items you use every day are just as valuable when you are considering your homer’s insurance and your estate plan.
It’s better to protect yourself now and document your possessions rather than trying to do it after something has happened.
A home inventory will give you an accurate recording of your assets for insurance purposes. It will also give you a better idea of how much homeowner’s insurance you need to ensure proper coverage.
How to do a Home Inventory
There are several ways to document your possessions. You’ll need to find what works for you and then discuss your decision with your insurance company to ensure they feel it’s the best way. Here are a few suggestions for you to consider.
Tip: Don’t forget to document everything! The items you use daily are probably more valuable than you think. Imagine replacing your furniture, dishes, silverware, clothing, bed linens, books, CDs, DVDs, etc.
The everyday items you use would probably cost more to replace than the things you think of first, such as electronics, jewelry, art, etc.
1. Video Tape Home Inventory
When you videotape your entire home, you’ll show everything you have so it proves what’s in your home. The best way to do this is to start at one end of your home and work to the other end. Speak to the camera while you video explains everything you look at, so the insurance company knows what you’re talking about.
This video doesn’t need to be professionally done; your home video recorder will work perfectly. All you need to do is walk around your home and take a video of the important things that are covered in your home insurance policy.
Make sure you include the garage and any other buildings on your property that are listed in your homeowner’s policy.
2. Home Inventory with Photos
When you document your possessions for insurance purposes, photos work well. You’ll need to take clear pictures of everything you want to be covered. When you print them out, document where the item is in your home and what it is, if it’s not obvious from the photo.
As with videos, you don’t need professional photos. Your digital camera will work just fine for the needs of your insurance company. The most important thing is that you take the pictures close enough to see the item and where it’s located in your home.
3. Home Inventory via Documentation
This process is similar to creating a financial inventory: start by writing down everything you want to be insured. Document where the item is in your home and what it is. Include serial numbers and model numbers if applicable. You can then give a copy of the sheet to your insurance agent.
It is probably a good idea to document your possessions in conjunction with video or photo documentation. Doing this gives you a listing of serial numbers, model numbers, and other specific information that will help file a claim.
4. Documenting One of a Kind Items and Other Valuables
You may wish to get a professional appraisal for jewelry, artwork, antiques, memorabilia, and other one-of-a-kind or hard-to-replace valuables.
Be sure to check your homeowner’s insurance policy for limits on single items and take out a rider on these items if necessary (for example, my wife and I took out a rider for her wedding ring).
Tip: Get homeowner’s insurance rate quotes at least once per year to ensure you get the best value for your needs. Be sure to include any riders for valuable property in your homeowner’s insurance quotes.
5. Where and How to Store Your Home Inventory
Your home inventory doesn’t do you any good if it is in your house and it is stolen, burned, damaged by floodwaters, or otherwise destroyed.
You should consider keeping a copy in a safe deposit box if you have one, with a relative or close friend, with your insurance agent if they keep copies for customers, or uploading to an online file storage service like DropBox, Google Drive, Apple iCloud, or Microsoft OneDrive.
If you have a fireproof safe, keep a copy of your documentation there for safekeeping.
Better safe than sorry!
You never know when something terrible may happen, so it’s better to be protected. The suggestions above will help you learn how to document your possessions for insurance purposes, so your items will be protected if something happens.
This information will also give insight into how much homeowners insurance you should buy, make it easier and quicker to settle a homeowners insurance claim, and make it easier to substantiate any losses for tax reasons.
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Hank says
My family makes sure to keep our packing lists / inventory sheets from the moving company when they box up all of our worldly possessions. Granted….it is a somewhat vague gauge and more details are needed in photos and video, but the inventories give you a great starting point.
Ryan says
Good point – and a useful solution for people who move often. Just be sure to keep a copy off-site to prevent a fire from destroying it. 🙂
MistyLa Mont says
I currently moved into a new home. Three months later my old home burned to the ground. Now that is a wake up call. I no longer owned the home, it wasbeing remodled before the owners moved in,thank God no one was hurt. (the cause was a spark off the electric line) I was on the phone with my insurance agent as the house was burning. I am glad I did because I thought I had more coverage than I did. I took inventory, pictures, video. I have copies, they are all in safe places, away from my home.
Ryan says
Wow, Misty! Thankfully no one was hurt. Thanks for sharing your wake up call!
Neal @ Wealth Pilgrim says
I like this article.
I sent my video to my insurance agent too…just to be on the safe side.
Neal A. Deutsch, CFP says
Great article. In addition, if you have any receipts for your purchases, you may want to lay them out and photograph or video them as well. The same can be said for any appraisals of jewelry, collections, antiques or any documentation that may get destroyed in a fire, flood or other catastrophe. Set up an appointment to meet personally with your insurance agent to make sure you are adequetly covered, and not under or over-insured. If you sell or give a piece of jewelry to your choldren, be sure to remove it from your policy.
Ryan says
Great tips, Neal. 🙂