No one ever wants to have to make an insurance claim. Claiming means something unexpected and destructive has happened; the stress of dealing with a break-in or a fire can be overwhelming.
To reduce stress, speed up the processing of your claims, and ensure you have the right level of coverage, it’s essential you create a home inventory list. Items in your home should be described by name, price, and a brief description. Other categories can be added; the more detail you have, the better!
The Value of a Home Inventory
Home inventory lists exist primarily to improve your relationship with insurance companies. Understanding the total value of the items in your home can help you determine how much coverage you need. You’d be surprised how much the stuff around your house is worth when you total it all together, and you might need more coverage than you’d suspect.
We hope you never have to claim – an old adage in the insurance world is that it’s one of the few products you buy in the hopes of never having to use it. Here’s a thought experiment for you: right now, without looking around, list every single item in your home, make and model, when you bought it, and the value at the time of purchase.
Pretty hard, right?
Now, imagine doing the same thing during the stress of dealing with whatever hazard caused you to claim. Unless you have a photographic memory, we’re talking about a task that’s basically impossible. When you’ve already compiled an inventory, claiming becomes much simpler, and your levels of stress go down substantially.
Having a home inventory isn’t just useful for insurance, though. There are times you might wonder whether it’s best to repair or replace appliances; knowing the year you bought them and how much they cost can help you figure out what’s the most financially prudent move. Organizing almost anything has a number of benefits.
I Rent. Do I Still Need a Home Inventory?
The answer is an emphatic yes. The value of homeowners’ insurance is largely in the protection it grants your home, which more likely than not, is worth quite a bit more than the stuff inside your home.
When you rent, the value of your insurance is found almost entirely in coverage for contents. That means you’re paying almost exclusively to cover items in your home; determining their value is essential to finding the right level of coverage.
There are a lot of tips for first-time renters, from how to find a place to how to spruce it up. One of the best tips? Get tenant insurance. It’s relatively inexpensive and it can save you a lot of grief!
How Do I Make a Home Inventory?
You can make a home inventory physically or digitally; there are a lot of advantages to the digital format. First, digital inventories are easy to sort and edit. Second, digital inventories hosted on the cloud give you an added level of security. When you have a physical inventory in your home, it’s at risk of being damaged by the same hazard that caused you to claim. Should you opt to keep a physical inventory, keep it in a safe place outside the home. The best option is to create multiple copies, both digital and physical, of your inventory, and to keep them in separate places. The downside to this method is that it can be quite time consuming if you need to edit your inventories.
There are a variety of home inventory apps you can opt to use. You have to pay for most of these apps, but some offer free services. Honestly, though? You can create a comprehensive home inventory list with little more than a spreadsheet.
Organizing Your Home Inventory
Your home inventory should at the very least contain three categories: the item’s name, its value, and a brief description. Determining the value of an item can be a bit tricky, so it’s often easier to simply list the year you bought it and its purchase price – that way, you don’t have to calculate depreciation yourself.
The name of the item should be as detailed as possible: make, model, serial numbers, and any other identifiers the manufacturer may have used.
Creating an inventory for collectibles can be a lot more complicated because you have to track the market value of what you’re collecting. Getting your collection appraised regularly can help you keep your home inventory up to date and ensure that you have the right level of coverage.
There are a number of other categories you might include in your home inventory. Marking the item’s location (or better yet, creating a page in your inventory for each room in your home) is a good way of keeping your list organized. You might also opt to document whether or not the item is warrantied, the item’s condition (new, excellent, poor, etc.), and whether or not you’ve kept proof of purchase. These categories are another reason digital inventories are handy; you can sort by category to make reading and editing that much easier.
Updating Your Home Inventory
You should be updating your home inventory anytime you purchase items of substantial value. You probably don’t need to update it every time you go grocery shopping (unless you have very expensive tastes), but new furniture, electronics, appliances, and similar items should be listed. In the same vein, selling your old items or renovating your home will mean it’s time to update your inventory. Our broker friends out in Winnipeg, Reider Insurance, agree; they’ve seen the stress of home insurance claims go down substantially when their clients have updated home inventory lists.
Home Inventories are Good for Everyone
Home inventory lists make life easier for you, your brokers, and the insurance companies. Claims can be processed with less stress when you’ve got an itemized list of everything you have covered, and brokers can find the right kind of insurance to suit your needs.