Homeowner’s insurance Q&A: “Do I need to inventory my home’s contents?”
Typically, it’s asked with a skeptical overtone…as though the insurance company may try to pull a scam at claim time by not coughing up the cash to cover the loss.
The basic answer to the question is “Yes.”
However, you do not need to provide a list of inventory to purchase a policy, but you must furnish one in the event of a property damage claim.
Either way, it is highly recommended that you create a list of your contents early and often, unless you want to be at the mercy of a claims adjuster.
And while you are not typically required to provide photographic evidence of your home’s contents in the event of a claim, it’s a smart move to do so to ensure you get your money’s worth.
Insurance companies have seen it all, so if you suffer a house fire and try to collect for your 14-karat gold toilet seat, you may be asked to show some proof of that particular purchase.
Let’s perform a quick exercise together. Real quick, grab a pen and piece of paper, and write down all of the contents of your smallest closet.
When the list is complete, go into that closet and see just how many things you missed. All the items you missed are items the insurance company will not pay you for in the event your home burns down and you are asked to generate that inventory.
Just to drive home the point, try to imagine making that list from a hotel room after your home was destroyed by a tornado.
The longer you take to generate the list, the longer your insurance claim will take to be paid. Why pay for the insurance if you are not properly prepared to use it in the event of a loss?
Remember, once you accept the settlement offer from your insurance company your claim is closed and that is the end of the process. No time outs, no do-overs.
You cannot go back three months later when you realize your forgot to inventory your power tools and half of your cookware and ask for a larger check.
How Do I Inventory My Contents?
There are a few different ways to document the items you own.
1. You can prepare a good old-fashioned hand-written list of your items. Go room to room writing down your list. This may include taking down serial numbers (from items that have them) and jotting down the year, make and model if applicable.
Additionally, you may want to provide a value for each of the bigger ticket items. It is not necessary to write down the value of your socks and t-shirts, so don’t get carried away.
Make certain to store this “master” list off-site. You may want to get a safe deposit box at your local bank, or at least a fire proof safe. Leaving the list in your home is a bad idea. It won’t do you much good if it is destroyed in the same event that destroys your items. A digital copy is also recommended.
2. Take pictures of your home’s contents if you are not a list writer. Preferably, take digital photos. Then upload those digital photos to your email account or put them in your safe deposit box. You can rest assured your email provider will take every possible step to maintain their servers…and your information.
Again, leaving the pictures on your phone isn’t the best option. You will run the risk of losing the pictures if you lose your camera or phone, whether in the same event that destroyed your items or not.
3. Pictures are worth a thousand words…digital video is worth a million. While shooting your footage, be sure to discuss the items you are looking at, providing the serial numbers, purchase date and value as you go.
As with option “2,” make sure to upload the digital video to an email account or keep a copy of the file in the safe deposit box or fire-proof safe.
4. Pay someone to do all of this for you. There are several companies who will perform this service for you. You can expect them to complete all of the main steps listed above. Typically, there is an up-front cost for the service and a smaller fee each year you wish to continue the storage of your data.
Remember, it is not necessary to write down every single pair of underwear and count all of your remaining “Happy Holidays” napkins. You simply want to be able provide your insurer with a relatively detailed estimate in a very short amount of time.
What About High Value Items?
If you have higher value items, such as jewelry or firearms, you should consider “scheduling” those items on your homeowner’s insurance policy.
Scheduling your contents is a term used to describe listing the items on your policy separately from the general contents coverage amount. You may be required to provide an appraisal for particularly expensive items.
At the end of the day, it is not a bad idea to have an inventory of everything you own…whether for insurance purposes or just to be aware of your personal belongings and/or finances.
Related: Contents insurance