Doing an inventory of your possessions serves three important purposes, according to the Insurance Information Institute. The final tally tells you how much homeowner’s or renter’s insurance to have. Documentation speeds up the claims process in the case of property damage or theft. It also verifies the loss for your income tax return. Follow these three steps to create an accounting of the valuable items you own.
1. Make a list and check it twice.
First decide on an inventory method. Use basic tools such as pen and paper or you record items in a document or spreadsheet on your computer. There are also several home inventory apps for smartphones, tablets and computers. Tech blog Mashable recommends MyStuff2 Lite, Visual Inventory and Inventory Buddy, among others. Some insurance companies have their own programs, that allow you to easily share the information with your agent.
Use the chosen method to note possessions of value in your home. Some people go room by room, and others prefer to inventory by type, such as by furniture and electronics.
Also take photos as you go. You need not shoot every pair of pants in the closet, but snap a pic of your TV and its model and serial numbers, as well as any expensive antiques, works of art and jewelry. The Insurance Information Institute recommends video taping a tour of your home to tackle numerous items of a kind at once, such as clothing and dishes. You simply narrate the video as you go.
If recording items with a spouse or fellow property owner, each take a room or category and then double-check the other’s work with a fresh pair of eyes to ensure valuable items don’t get missed.
2. Include copies of receipts and appraisals.
Homeowner’s policies pay either replacement value or cash value, the latter of which takes into account depreciation. No matter which level of coverage you have, receipts and appraisals help you get as close to your original investment as possible.
Attach the documentation to your list either as paper or scanned copies. For items that increase in value with each year, get any appraisals updated to ensure they remain accurate. And make it a habit to add receipts to your inventory after big purchases.
3. Save your inventory somewhere safe.
You may be tempted to lock the inventory up in a fireproof safe in your closet for easy access. Don’t, unless the safe itself has been secured. These types of safes protect documents and other valuables from fire and water damage, but a thief can easily steal them. Invest in a safe deposit box at your bank for greater security. Also scan a copy and upload it to cloud-based storage so you can access it whenever you want.
According to the Insurance Information Institute, about three out of five homeowners have completed an inventory of their possessions. Join the former group to make recovering from property damage or theft much easier. Also use it to assess your current level of coverage. After inventorying the items in your home, you may find that it lacking in terms of what it covers and the payout it provides. Additional coverage and/or separate policies may be needed.