Home Inventory: Easing the Stress of a Property Insurance Claim

Imagine briefly that your home was struck by an unfortunate disaster like a fire or burglary. Soon after, when you are safe from immediate danger, and the authorities have the situation under control, you’d pick up your phone and contact your insurance company to file a claim.  And when the claims adjuster meets with you to settle your claim, he or she will hand you a form and advise you to list each item that was lost or damaged.

At first you think to yourself, “This shouldn’t be too hard.” Besides, you live there and you know your stuff . . . right?  On second thought, you may have collected many possessions over the years, and now the task is daunting.

Now in order to get paid for your stuff, you need to remember and document – from memory – every item that you owned. And equally important, you need to show proof that you actually owned the property that you’ve reported as lost or damaged.

But how can you do this when your property was stolen or burned to nothing but a pile of ash? Suppose you had a photographic memory – that would help you with the first task of remembering and writing down a list. Although that would be nice (and very few have that gift) it won’t help you prove ownership – and now you are paddling upstream to prove your case. Undoubtedly, this is where a home inventory would really come in handy.

You might ask yourself, “Why should I even bother?” or “It’s too much work” or even “I’ll get to it in a couple of months.” And some might even complain that insurance companies should just accept their word, and pay a claim based on trust. In a perfect world, a handshake would work – but because of a few “bad apples” we all must jump through some hoops.

Now in my experience, insurance companies are generally fair; nevertheless, they just won’t hand you a blank check. Insurance fraud is a major concern and insurance companies need to verify all losses before paying claims. (Can you imagine how high homeowners insurance rates would skyrocket if companies paid every claim without question — nobody would be able to afford it.) Insurance companies must be fair and prudent. Here’s the secret: with a good home inventory, you are giving the claims adjuster what he needs (proof) to get the check signed to pay you for your loss of property. Without documentation and proof, the wheels come to a screeching halt.

Now that we know that it’s a good idea to have one, we need to decide on an inventory method that works for us. There are multiple ways to get this done, but we want to get the ball rolling with the easiest, least time-consuming, “anyone-can-do-it” method. Every type of documentation has its strengths and weaknesses, but one method stands out to me as the all-around pick – the video/photographic method. (If possible, supplement this method with others discussed later)

It’s simple: just pick up your camera; start shooting; open drawers, cabinets and boxes; capture serial numbers and fine details when possible (the more expensive the piece, the more attention to give it.) Move from room and before you know it, you’ve got your home inventory. Oh, and don’t forget the garage, detached structures, sheds and outside items.

Now you’re almost there, so soon after, you need to secure your documentation. Whatever you do, don’t just throw it in a drawer at your home; if you experience a fire your inventory will go up in smoke. Use the risk management techniques of duplication and separation. Make a copy and store it off-site — with a trusted source, whether that’s with a family member, safe deposit box or a secure online backup service. This way if anything happens, your home inventory will be safe and sound.

It is important to note that everyone is different, and as such, you may require using multiple methods of documentation for your unique property. As we could spend hours getting into the nitty-gritty of home inventories (which none of us have time for), I would like to point out some ideas and resources to help you get as close as possible to having indisputable documentation — and get you a prompt and fair settlement in the unfortunate event of a loss.

Reasons to Have One

• You Might Have More Than You Think
• Help “Jog” Your Memory to Recall Your Owned Property
• Establish Proof of Ownership & Value
• Document Serial Numbers, Condition, and Authenticity
• Calculate the Amount of Insurance Necessary
• Helps You Consider if You Need to Schedule Special Items on Your Policy (e.g., jewelry) Due to Sub-Limits Which Limit the Amount Paid for Certain Items.
• Aid in the Filing of a Police Report
• Limit Stress & Expedite Claims Settlement
• Receive Full Compensation for Your Personal Property Loss
• Also, for home and condo owners, this is a good time to chronicle all of the features of your structure to provide to an insurance company if anything happens to your home.

Methods

— Manual

• Checklist
• Appraisals – Establish an Expert’s Opinion of Authenticity, Condition, & Value.

— Digital

• Photo – Great for Proof of Individual Items, Close-Ups, Details, & Serial Numbers.
• Video – great for putting items in context in your home.
• Home Inventory Spreadsheet
• Home Inventory Software Program
• Online Programs – Free Service available at www.KnowYourStuff.org
• Scan Receipts, Appraisals & Other Supporting Documents.

— Done-for-You Service

• Home Inventory Company

Storing & Updating Your Inventory

— 1^st – Duplicate

• Make photocopies
• Burn a CD/DVD or put on a Flash Drive
• Copy digital files to another folder on your computer

— 2^nd – Separate/Back-up

• Safe Deposit Box
• Give a Copy to a Responsible and Trustworthy Friend or Family Member
• Online Backup Service to store offsite

— 3^rd – Update

• As you acquire more property, make sure to amend your inventory

Bottom Line

We want the best for you and your family. So c’mon and do yourself a favor. Start your home inventory soon — it’ll make for an all-around better home insurance claims experience.