Do I Need a Personal Property Inventory?

Why Do I Need a Personal Property Inventory?

Your homeowners insurance provides you with the security of knowing that your personal possessions are protected in the event of a loss. However, an insurance company can only pay you for the items you can document after a loss has occurred.

That’s where a good home inventory comes in. A home inventory can:

Speed up your insurance claim because you won’t spend time trying to make an inventory after damage has already been done.
Maximize your claim payment because you won’t forget any of your belongings.

It can make your life a lot easier as you begin the process of replacing your personal property. You should conduct an inventory of your personal property so that you have a record of what you own. Following a loss, this inventory can assist you in determining the items that were destroyed or stolen.

What Should Be Included in a Home Inventory?

A good home inventory should have the following information:

A description of the item, including the make and model (if applicable)
Estimated value of the item
Purchase date
Receipts
Serial number

You’re obviously not going to have receipts for everything you own. But for general categories, like clothing, you can provide a count. For example, “Six pairs of jeans, 10 dress shirts, two pairs of sneakers.” But make sure to note any valuable items, like an expensive suit or dress. It is a good idea to update your inventory periodically as you purchase new items for your home.

And don’t forget off-site items, such as belongings you keep at a storage facility. Your homeowners insurance policy may cover items at off-site facilities from problems like theft and fire.

How Do I Make a Home Inventory?

A home inventory can be as simple as a written list, pictures or video. Or use a home inventory app to help you compile your list. As you inventory your personal belongings, don’t forget all of your drawers, closets, attic, basement and if you’re brave, take a look under your bed.

However you decide to create a home inventory, the key is to be as detailed as possible and to store a copy of the inventory outside your home. For example, you can store an electronic copy in a cloud service or keep a hard copy with a relative.

You’ll also want to update your home inventory on a regular basis. It’s a good idea to update it every year. That way you can add any items you’ve acquired or delete items you’ve gotten rid of.

Make a List

A list can be as simple as a pen and paper or a spreadsheet on your laptop. Here are some organizing tips to get you started:

Organize your list by room. Pick a room and record all of the contents. For example, start in your living room and list everything, like your TV, coffee table, recliner and sofa. Don’t forget the small stuff, like books, knickknacks and decorations on your shelves.
Organize your list by groups of items. Or, group together items like antiques, artwork, clothes, collections, jewelry, kitchen items, furniture, musical instruments and miscellaneous items.

Take Photos and/or Video

If you have a smartphone, you have the tools you need to record your personal belongings with photos or video. Take a walk through your house and capture each item. If possible, get a clear shot of the serial number. If you’re taking a video, it’s a good idea to describe the item, its estimated value and the date of purchase.

Using a Home Inventory App

You can use an app for your smartphone or tablet to list items, store photos and video. The National Association of Insurance Commissioners recently launched a home inventory app (available in the App Store or through Google Play) that has the ability to:

Group belongings by category
Scan barcodes for accuracy
Upload and export photos
Find disaster preparation advice
Review information about filing insurance claims

Here are more home inventory apps.

Some apps may not be available on all operating systems and may require in-app purchases.

Re-Evaluate Your Insurance on Valuable Items

While you’re documenting all of your stuff, it’s a good time to take a look at high-value items such as jewelry, musical instruments, artwork and electronics. That’s because homeowners insurance might put a special sub-limit on certain types of items.

For example, a common homeowners insurance policy puts a $1,500 limit on theft coverage for jewelry and watches. If you have valuable items, you can “schedule” them. Scheduled personal property is an add-on to homeowners, condo or renters insurance to insure high-value items for their full value.

Quick Tips for Insuring Your Possessions

A homeowners insurance policy will have specific coverage limits for “contents,” meaning your possessions. Check your policy’s declarations page to see what your contents limit is. Does it appear to be enough to replace all of your furniture, rugs, curtains, clothes, appliances and other possessions?
Make sure your policy covers the replacement value of your possessions, not the actual cash value. An actual cash value payment would pay your only the depreciated value of your items, not new replacements.
If you live in an area that’s prone to earthquakes or floods, you could consider earthquake insurance or flood insurance. Without them, your home and belongings won’t be covered in these disaster situations.

How Do I Know I Have Enough Insurance?

A household inventory can also help you determine how much insurance you need to cover your possessions.Your coverage should always equal what it would cost to replace your property at today’s prices, less a reasonable amount for depreciation.You should also have high-value items such as jewelry, furs and fine art objects appraised regularly to ensure that you have enough insurance to cover their value.