A new survey shows that many homeowners are not prepared to make an insurance claim after they’ve experienced a natural disaster because they don’t have a home inventory list. The survey by Farmers Insurance shows that 44% of U.S. residents have never done an inventory of their possessions even though 70% of Americans have experienced damage from a natural disaster. (1)
It may seem like an unnecessary task to log information about your possessions. After all, you see them and use them every day. You may feel their existence is etched into your memory. But when disaster strikes, like a flood, fire, or tornado, you may suddenly have to tap into those memories, and you may not remember all the details.
Jim Taylor, of Farmers Insurance, says of the task, “It may not be the most Instagram-able way to spend a Saturday night, but taking a weekend to create a home inventory list is a great example of how a little precaution can go a long way in the future.”
Spring is also a great time to put together an inventory because you can combine it with your spring cleaning. Taylor suggests that you “build your inventory list process into your annual list of spring cleaning to-dos.”
He said in a press release, “As you’re tackling spring cleaning projects, consider going room by room to make an itemized list of all of your belongings. Try to be as specific as possible about each item, and if possible, include copies of original receipts.”
Why Bother With a Home Inventory?
When disaster strikes, chances are you will be very busy trying to put your life back together and the last thing you’ll want to do is spend hours and hours trying to prove what you own to an insurance company. Having a home inventory list makes it easier and faster for insurance companies to assess your loss, and to write a reimbursement check that will help you recover.
Surprisingly, Taylor says that more Millennials have a home inventory list than Baby Boomers. The survey found that 49% of Millennials have made one compared to just 43% of Boomers. And, it’s not that difficult to put one together.
Creating a Home Inventory
Farmers Insurance offers some advice with three main points. (2)
- Write it all down. Have a pad of paper in your hand and list everything of value as your walk through your home. You may want to include a short description, any serial or model numbers, the purchase date if you have it, how much you paid for it, and how much it would cost to replace it. If you have any receipts, mark that on your inventory and keep the receipts in a safe place.
- Take photos. Go down your list and take photos of everything individually. If there are important details that are difficult to see in the photo, like an artist’s signature or a precious stone in the middle of that ring, take a close-up. You may also want to photograph those receipts.
- Shoot video. It’s easy to do with your smartphone. This can be done by standing in the middle of each room and recording video as turn your body in a circle.
Illyce Glink, of Best Money Moves, says, “Creating a digital treasure trove of images, video, receipts, and other items that prove value is a smart way to build your home inventory.” She says, “Should a catastrophe strike, you’ll be able to prove the insurance company what you owned and how much it cost to buy – and might cost to replace.” (3)
Home Inventory Helps Assess Coverage
Taking a home inventory will also help you determine if you have enough insurance on the contents of your home. Taylor says many people accumulate more possessions than they had when they first insured their home. Once you’ve created a home inventory, you should review your coverage with your agent to make sure you are not short-changing yourself.
Once you’ve put it all together, make sure you store it in a safe place. If you want to keep a written list of items with photos and receipts, it’s best to store them in a safe spot outside your home, like a safe deposit box. It’s also good to have a digital copy of all your home inventory information. You can store that in the cloud where you can easily access it later from anywhere. You can also record your home inventory onto a CD or DVD and keep that in your safe deposit box.
As you may of heard, Rich and I experienced our first natural disaster when the fires destroyed hundreds of homes in Malibu. We were very lucky in that it only burned our RV and a shipping container that held our building supplies. We had receipts for the building supplies and were promptly reimbursed for those. We also had receipts for the RV and the mountain bikes inside it, and were also quickly reimbursed. I didn’t really like that RV anyway. So we used the insurance money to get a tiny home on wheels that qualifies as an RV – so we can park it in the driveway.. and it will serve as my new office!
But what we didn’t realize, or think about, was that all our building permits and plans also burned up in the shipping container. When our developer met with the city, he found out they couldn’t find their copies either. Fortunately, the developer had scanned everything – so we were OK.
So scan everything! It’s harder for important documents to get destroyed in the cloud. Maybe have two back ups. Many homeowners in Malibu cannot find their plans – as they burned in the fire, and now are going to have a much more difficult time rebuilding their homes.
And I also know many people who rented their home and did not have renter insurance. They lost everything with no reimbursement at all.
(3) Purpose of Home Inventory: Think Glink
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