If your belongings are ever stolen or destroyed by a fire or other disaster, an itemized home inventory can be the difference between prompt payment for your insurance claim and aggravating phone calls. Although it may require a bit of time, creating your inventory does not need to be an exhaustive process. Here’s what you need to know to create an effective home insurance inventory in a quick, efficient manner.
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Why do I need a home inventory for insurance?
The personal property coverage in your home or renters insurance covers items such as your furniture, electronics and clothing for theft and damage, but you need to provide a list of your content losses to the insurance company to receive a check.
A home insurance inventory is an itemized list of your contents accompanied by key details that allow you and the insurance company to calculate the value of your claim.
Having a list showing the specific details about when and where you purchased your items, how much you paid and other details serves two main functions:
- It provides credible verification of the value of your personal property losses to your insurance company.
- It gives you a stronger case in a dispute over your insurance settlement.
A home insurance inventory also makes it easier to document your losses than trying to rely on your memory while dealing with the stress of a disaster or burglary.
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How do I create a personal property inventory for insurance?
Smartphone apps make it easier than ever to create and maintain a personal property insurance inventory, but an array of other digital and analog options are also available.
One simple approach is to use the video camera on your smartphone to capture images of your contents while describing their details as you go from room to room.
A still camera works nearly as well, but it won’t capture your verbal descriptions.
Another approach is to supplement your video or photos with a digital spreadsheet or paper worksheet containing written details about each item, such as serial numbers and purchase prices.
The advantage of smartphone apps is that they often allow you to consolidate photos with receipts and written records, rather than leaving these details spread out in multiple documents, files and/or folders.
Two of the better smartphone apps we’ve found are Home Inventory, offered by the National Association of Insurance Commissioners, and Encircle, developed by a Canadian technology company. Both allow you to create a home inventory from scratch or consolidate data and images you may already have into a single report.
If you go the app route, make sure to choose one that allows you to export your inventory into a format you can read and manage, such as a PDF or spreadsheet.
Regardless of the format you choose, your personal property inventory needs to remain accessible to you in the following ways:
- Regular access: Keeping the master copy of your personal property inventory on your smartphone, computer hard drive or in your file cabinet makes it easy to update when you acquire new items.
- Emergency access: You also need to keep a duplicate or backup copy of your inventory in a location away from your home, in case a fire or other disaster destroys your computer or file cabinet.
Secure cloud folders work well for backing up digital copies for emergency access. Consider keeping printouts of your inventory and related documents in a safe deposit box or with a relative or friend, even if you also have a digital version backed up in the cloud.
What should I include on my home insurance inventory?
A good home insurance inventory should include an itemized list of each of your possessions, along with information that demonstrates the value of each item or set.
Your personal property inventory needs to include as much of the following information as possible:
- Purchase dates, locations and prices
- Each item’s brand, model name, model number and serial number
- Receipts and photos of each item
If you haven’t saved receipts or other purchase records, provide as much information as you can recall.
The more details and supporting documents you provide, the easier it becomes for the insurance company to accurately determine how much they need to pay you for your claim.
If you’re using an app or digital format, use your smartphone to take photos of receipts, which are easier to manage than paper slips. Smartphone cameras are also handy for capturing model and serial numbers on items such as appliances and electronics.
For clothes, general descriptions such as “four silk blouses” or “six pairs of women’s dress shoes” typically suffice. However, be sure to include specific details about any clothing items with particularly high value.
You should also add copies of any appraisals you may have for jewelry, fine art, antiques and/or other unique valuables to the documents you keep with your home inventory.
Since home and renters insurance typically places sublimits on valuables such as jewelry, your home inventory may help you decide if you need to add an endorsement or rider to cover these items.
Don’t forget to include items you store in a basement, garage or storage unit. Even if you don’t use these items on a daily basis, their combined value can add up to a significant sum.
When should I update my home inventory?
It’s generally best to update your home insurance inventory as soon as you purchase new items and review your inventory every year or two to make sure it is still accurate.
Once you’ve created a home inventory, it’s relatively easy to add a new appliance, device or other items.
For digital formats, just capture images of the receipt and model and serial numbers on your smartphone. You can then email the photos to yourself or upload them to your app, along with relevant written details.
It’s also a generally good practice to review and update your personal property inventory when you receive the renewal notice for your homeowners insurance policy each year, or at least every other year. This is also a good time to replace the physical backups you keep with updated copies, if you have not already done so.
An updated home inventory offers the additional benefit of helping you make sure you have enough personal property, or contents, coverage for your belongings. If the combined value of the items in your contents inventory exceeds the personal property limit in your home or renters policy, it’s time to increase your contents coverage.
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