Suppose you returned home tonight to find a badly charred house. Could you recall each item destroyed in the fire? Would you know its value? Large items may be easy to identify – the refrigerator, TV, and sofa – but how about items like electronics, silver and china?
Although most homeowners and renters buy insurance to protect their personal property, far fewer take that extra step of making a complete household inventory. Why? "It takes too much time." "It seems like an overwhelming task." "Oh, I'll probably never use it." If you find yourself identifying with these excuses, stop and refocus!
How will you benefit?
- A household and personal property inventory gives you:
- a permanent record of the contents of your home and their value to verify ownership in case of a loss;
- a quick way to determine what is missing or destroyed, especially if you have photographs of each room;
- serial numbers for "theft-prone items" so stolen items can be identified easily;
- a good indication that you have adequate insurance coverage; and
- accurate estate-planning data.
Where to begin?
First, decide to take a household inventory. Then set aside a specific time(s) to do it. Make it a family occasion – don't think of it as a laborious task. For example, have your children help you find out the cost of replacing various items. Older children may enjoy taking pictures of items to be included.
Most insurance companies provide forms to help you record your household and personal items. You can purchase software, downloaded it from some free sites or you can develop you own.
Do your inventory room by room. Separate personal property into categories: for example, appliances, furniture, dishes, and linens. If possible, include the item's brand name on your inventory. Don't forget to inventory the garage and basement. Also think of items that may be in a temporary residence like a college dormitory or a vehicle that has tools used in your work.
- Indicate how many you own of each item.
- Record the serial number of each item when appropriate.
- Determine the year you purchased the item.
- Record how much you paid for the item new. If it is an antique rocker your grandmother gave you, you should have it appraised. For less valuable, hand-me-down furniture, you may need to estimate original cost.
- Determine and record the item's replacement cost. Often newspaper ads, mail order catalogs and websites can give you a good idea of current prices.
- Photograph the room from opposite corners to capture most of the items in it. Then take close-up pictures of valuable or unique items, such as antiques, jewelry, coins, and stamps.
Quick and easy methods
Another method of taking a household and personal inventory is to make a video recording. You need not go out and buy one. Borrow one or rent one from a video store and rental business. You could even use your camera or phone if it capable of a video recording.
Before you begin, have; available each item's cost at purchase, the year purchased, replacement value, and serial number. You can then do the recording while giving this information verbally.
A third way to take an inventory is to do it on your computer, making it quick and easy to update.
Where do you keep the inventory?
Once you've done your inventory, keep it in a safe place away from home, like a safe deposit box at your bank. Update your inventory annually to keep replacement costs current and to add or eliminate items as necessary.
What if you don't do an inventory?
If you never get around to a personal and household inventory, be prepared to accept the consequences. If you have a loss and no inventory, the claim settlement will be much more difficult. The insurance claims adjuster is forced to rely on information such as receipts, cancelled checks, credit card slips, or tax records, many of which may also have been destroyed. Without that proof, you are likely to receive a lower settlement payment than expected, one that will not be enough to replace lost belongings. Even an incomplete inventory, however, than none at all.
It's your responsibility to take an inventory. Your insurance agent won’t check to see if you’ve done an inventory unless you have a loss to report. Look around your home now. Can you afford not to have an up-to-date household inventory?
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