In the event of a natural disaster or fire, would you be able to remember all the belongings in your house? An accurate home inventory for insurance will help you settle your insurance claim more quickly and help you determine how much insurance you actually need.
How Do I Create an Inventory List for Insurance Purposes?
We all have possessions in our homes that we consider priceless for their personal or sentimental value. When you think of the value of your house contents for insurance purposes, it is easy to focus on those irreplaceable items and miss the bigger picture.
Estimate the replacement cost of household items you use every day, and you will see how quickly their value adds up. These items might include clothing, furniture, kitchen gadgets and dishes, electronics (such as computers, phones, and TVs), books, DVDs, CDs, sporting equipment, and more. Every homeowner or renter should have an itemized checklist of these belongings for insurance purposes.
How Do Insurance Companies Determine the Replacement Value of Your Home?
Most insurance companies will give you the option of choosing either the replacement cost or the market value of your property. To make an informed decision, you need to understand the differences.
Replacement cost is the price of rebuilding an entire structure from the ground up in the same location and specifications at today’s cost. The replacement cost also covers the cost of labour. The replacement cost will NOT cover the cost of your land or your mortgage.
Insurance companies will also consider the contents of your home. This illustrates the importance of an insurance inventory checklist.
There are several factors insurance companies use to calculate the replacement value of your home. The cost of materials, labour, building permits, and professional fees are considered. Your insurance company will most likely consult a loss adjuster to determine their liability. For this reason, you should consult with a loss assessor before submitting your claim.
The market value refers to the value of your property as a whole, including the land and amenities. This is an important distinction because two homes can have the same replacement cost and a vastly different market value. This is because market value accounts for qualitative factors such as neighbourhood quality of life, proximity to schools, and the local crime rate.
When and How Often to Make a Home Inventory List
You should start your home inventory list as soon as possible. Making a home inventory for insurance is easier than you might think.
You can start by walking from room to room and listing the items you want to insure. Every time you make a new household purchase, add it to the list. It’s a good idea to do an official walkthrough of your home every couple of years to make your list is up to date.
Measuring your home insurance list of items against your insurance policy enables you to assess whether you have adequate coverage.
What’s the Easiest Way to Start a Home Inventory?
The easiest way to start your inventory list is to grab your smartphone and take photographs of anything you want your insurance company to cover if you file a claim. You can even turn on your video and describe items in each room.
The most comprehensive inventory checklist will combine photos, video, and written documentation. You can enter information about your photos and videos in a home inventory spreadsheet and categorize items and their value by room.
There are even smartphone apps that will do this for you. Check with your insurance company to see what app or tool they recommend.
While you are building your home contents insurance checklist, create a “receipts” file, where you can keep receipts of your more expensive purchases. You can scan paper receipts and save them in this document.
If you have misplaced older purchase receipts, you might be able to retrieve them by checking your online purchase history on sites like Amazon and eBay. Your bank statements will also show purchases made by check or debit card.
The last step in completing your home insurance checklist is to research the replacement value for every item on your spreadsheet. Unique items and one-of-a-kind valuables such as art, antiques, jewellery, and memorabilia should be professionally appraised. Remember to include off-premises items such as storage units in your insurance inventory form, too.
A List of Your Belongings Will Make Filing an Insurance Claim Much Easier
Having to make a home inventory for insurance after a disaster is an unnecessary burden. Your insurance company will require an itemized list for insurance claims, so it’s best to be prepared.
Trying to recall the specific details of items lost due to fire or theft is stressful and leaves a large margin for error. It’s also easy to forget items that should be included in your claim. Your household inventory list is proof of your loss and key in securing the highest payout from your insurance company.
Keep Your Home Inventory List Safe and Accessible
Many people store their inventory of household items in their house, not thinking about what will happen if their home is destroyed in a fire or natural disaster. It’s important to store a copy of the list outside of your home so the list doesn’t get destroyed, too.
Once completed, print a hard copy of your property checklist and keep it in a safe place outside of your home, like a safe deposit box. You can also keep a copy of your checklist on a memory stick in a different location. Save a digital copy on an online storage platform like Dropbox, Google Drive, or iCloud.
Home Insurance Inventory Checklist
Follow these simple steps to achieve peace of mind in knowing your assets are protected:
- Take photos and/or video of all household items you want to insure. Remember to include belongings in off-premises storage units.
- Upload the photos and video to your computer.
- Research the replacement value for every item on your spreadsheet. Enter the value (and any other relevant information) of each photographed item in a home inventory spreadsheet.
- Organize your receipts and upload them to a separate “receipts” folder.
- Save the document(s) to a secure online storage platform.
- Print a hard copy of your insurance inventory list and keep it in a safe place outside the home.
- Don’t forget to update your home inventory for insurance every few years.