“Make a home inventory!” It’s one of those things we’ve been hearing by financial advisors on TV and our insurance agents often recommend this to us, yet we tend to hold it off. Official polls by the Insurance Institute show that only 50% of all homeowners make a home inventory list, a percentage that seems to remain consistent over time. The main reason is that people don’t see the benefits of making a home inventory or don’t know what it’s about also because it’s easier to forget about it than have to make a list of every bookshelf, gadget, and closet you own.
So, what’s a home inventory list and should I make one? The home inventory list is a list of belongings in your home. Even a basic list of the most valuable items in your home could constitute a home inventory list. Homeowners can expand their list by recording videos of their belongings to get reimbursed in case they’re damaged.
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1. You Can File Claims
Take a look around your house: the laptop, TV screen, furniture, clothes, jewelry. All these items are worth money. If one of them got stolen or burnt down in a house fire, you could file a claim to get them replaced. Your home insurance policy doesn’t only cover the structural damage to the home but your personal belongings too. This extends to renters insurance as well. Typically homeowners get coverage in the $30,000-50,000 range for personal property. This coverage should be enough to replace your clothes and electronics. However, if you have valuable items you could increase the coverage on your personal belongings. Make no mistake, it’s still possible to file a claim without a home inventory list. However, it’s easier to estimate the damage caused if you kept an inventory in the first place.
The inventory list helps you keep track of how much the insurance company owes you. Do you own a $2,000 e-bike, a $1,000 iPhone, a $5,000 wedding ring and a $700 flat screen? Write all of that down. You can make a list of everything you own really fast and show it to your home insurer to get the assurance you’ll get the coverage in case the items are stolen or damaged in your home. If they identify you lack sufficient coverage for a certain item, you can upgrade your policy to get full coverage. The insurance company uses a home inventory list to pay you, and if you miss one of those items you might miss compensation because it’s difficult to remember everything that was damaged or stolen.
2. It’s Easy To Make A List
You can make a list in 5 minutes. All you have to do is write down all the items you own by walking around your house. Start with an easy spot such as the living room or the kitchen. How many couches and tables do you own? How many electronics are in the living room? Are there any art pieces hanging? Write all that down. You can estimate the approximate value later, you only need the names of the items. If you want to take it a step further, you can write down when you purchased each item and take notes of the model and make including how much you paid for it at that time. You can also sort items by category. Example: 14 pairs of jeans, 30 pairs of shoes, etc. Write down detail about any high-value item you possess: Rolex watches, art pieces, antique rugs, anything of particular value. Those have to be insured separately.
To provide evidence of personal belongings, the insurer might ask you for further proof. Instead of taking pictures, take one video tour of the house and then take individual videos of each room. You should capture the whole room at once and then focus on the smaller items. The video doesn’t have to be of exceptional quality, and you could record a video on your iPhone. Then, back it up on the cloud. Make a “walk-through” of the house by walking inside the living room and picturing all the items as if you’re trying to sell the house. This gives indisputable proof that you own each one of those individual items. Once you’ve made videos of each room and recorded your personal belongings, write down a list that matches the items and back it up on the cloud. This should take you as little as 10 minutes and as much as 1 hour, depending on the size of your house and the belongings you own.
3. You Can Upgrade Your Policy
Review, review, review! Always make sure you double-check your policy and review whether you’re getting adequate coverage. It’s better to increase your policy by $50 a month than to come up $20,000 short when your items are damaged or stolen. Many people have had catastrophic events happen to them such as their whole house burning down and them finding out their coverage barely covers 50% of their belongings.
The agents should be helpful and help you estimate whether the coverage you have is adequate to provide full replacement cost for all your personal belongings. Schedule a meeting and record videos that you can show off in addition to your home inventory list. The agent will determine if you have adequate coverage, or you can make this calculation based on your current plan. You want to ensure you’re reimbursed for 100% of the replacement cost of your personal belongings in the event of an accident. This is why you need a home inventory list.