Your Complete Guide to Home Inventories
Home inventories make filing a claim and getting the money you are owed far easier.
Preparing a home inventory isn't difficult, but it does take time. Still, it's well worth doing, and by following the tips in this article, you'll be able to get yours done more quickly without leaving out anything important.
What Is a Home Inventory?
Whether you live in a house, a condo, or a rented apartment, you live in a space that's more than just a floor and four bare walls. It's filled with all the stuff you own, and part of the reason you have home or tenant insurance is to make sure you don't have to pay out of pocket to replace your possessions if something happened to them.
A home inventory is a complement to your property coverage. Basically, it's a detailed list of your possessions, along with images and their estimated value.
Why Home Inventories Are Worth Your Time
Itemizing everything you own might seem silly at first, but it's not just pointless clerical work. Here are some of the most important reasons for making and keeping a home inventory.
Better than Your Memory
You're quite familiar with your stuff, but you would be surprised at how difficult it would be to remember all of it after a loss. And if your home's been broken into or there was a fire, the added stress alone will be enough to have you drawing a blank (for related reading, see Has Your Home Been Robbed or Vandalized? Here's What to Do First).
Having your possessions stolen or destroyed is also dispiriting. If it happens to you, the last thing you'll feel like doing is sitting down to draft a list of each item you lost. You'll be thankful that you took the time to prepare.
When you report your loss to the insurance company, will you be sure that you haven't overlooked anything? What about seasonal items like your sports equipment, occasional items like the family silverware, or the heirlooms kept tucked away like your grandmother's jewelry? How long before you notice that these are missing, too?
Without a detailed list, it's easy to overlook something. It might be a trifling thing instead of a valuable possession, but why take the chance?
Quick, take a stab at how much your stuff is worth.
Whatever estimate you came up with is probably wrong, and there's a good chance it's lower than the actual amount. It's not uncommon for people doing a household inventory to be surprised at how much stuff they have and to be shocked at how much it's all worth.
When it's time to file a claim, you'll want to be able to put in the right dollar figures instead of lowballing yourself.
Getting Replacement Cost
Replacement cost coverage makes your insurance more expensive. And if you pay a higher premium for it, you want to make sure you get your money's worth when you file a claim.
If you want the insurance company to give you enough to replace the damaged or stolen item with a new one of the same quality and kind, they'll need the information found in a household inventory. If you don't have it, you might not get the payout you deserve.
Hitting that Insurance Sweet Spot
There's a bit of a balancing act that you have to do when buying insurance: you don't want to spend too much, but you also don't want too little coverage. If you compile a household inventory, you'll know exactly how much you need to protect and you can hit that insurance sweet spot of sufficient yet affordable coverage.
Streamlining the Claims Process
The claims process is goes more quickly and smoothly when you have good documentation and photographic evidence on hand. No one wants to scramble around trying to prove they had the lost item during a crisis. And you definitely don't want to wait any longer than you have to for your insurance payout (find out How to File a Claim that Gets Paid Sooner).
When your home takes a beating, you might need financial aid. You'll need documentation to substantiate your losses when applying, and being organized can speed up the process.
Government agencies may offer tax relief after a disaster. But throwing all your receipts in a cardboard box won't help you take advantage of these programs if your box of receipts is swept up in a flood or charred in a wildfire. Making sure information about your possessions is properly stored, backed up, and well organized will help you receive assistance and start rebuilding your life.
Preparing Your Home Inventory
No matter if you live in a sprawling four-bedroom house or a small apartment, the best way to approach your home inventory is by tackling one area at a time. Otherwise, it can become overwhelming.
Most home inventory apps allow you to separate your possessions by room, but you can start even smaller. Try doing one cupboard first: take a photo of every item and write down a detailed description for them. For instance, write "12-piece porcelain dinner set" instead of simply writing "dishes."
Fill Out the Details
You will collect further information, but you do not need to do everything in one sitting. Later, you can add the following:
- Model Name or Number
- Serial number
- Purchase date (actual or estimated)
- Receipt (if available)
- Estimated or appraised replacement value
Obviously, it may not be possible to remember when you bought something if you did not keep the receipt. Some items do not have model or serial numbers either. Just fill in what you can.
Keep and Copy Receipts
You should also create a file folder for any new items you buy and scan the receipts. Paper receipts tend to fade over time, but an electronic version remains intact.
Home Inventory Apps
Home inventories can be penned on paper or typed into a spreadsheet. But the simplest and most comprehensive approach is using an app designed for the purpose. With the right app, the information will be stored in one easily accessed, manageable location and unlike your hard drive or written document, it will survive a flood or fire.
There's no shortage of smartphone or desktop apps designed to help you compile a home inventory. They're the best way to store information because you can attach purchase dates, photos taken with your smartphone, receipts, and any other pertinent information to each item. You can also sort information into folders for separate areas of your home.
Look for an app that lets you search for an item online to find a comparable unit and price. This comes in handy when you don't have a receipt.
If you're not sure where to start, check out the Sortly, Encircle, and Magic Home Inventory apps.
If you don't know the retail value of an item, look it up online. eBay and Craigslist are great places to gauge the value of old or unusual items.
If you have expensive or collectible items, you will usually need an official appraisal. However, most times you need an official appraisal on expensive or collectible items. You can hire a certified personal property appraiser to access value and document your possessions for a fee.
If you own any of the following and do not have a receipt, get an appraisal to determine an accurate value:
- Gems, jewelry, precious metals, expensive rugs
- Antiques, heirlooms, collectibles, or collections
- Furs, fine art, firearms
- Expensive sporting, computing, musical, or photography equipment
Commonly Overlooked Items
People often forget to include the items that are tucked away way out of reach. Anything stored in outbuildings or off the premises should still be included. Be sure to include items stored in your:
- Storage locker
Also include anything you keep stored under your deck or items you have loaned out to someone.
Outdoor items like garden equipment, sporting goods, children's toys, lounge chairs and tables, and barbecues increase your inventory value and should be listed as well.
Items that are kept in self-storage facilities might still be insured by your home insurance policy, so be sure to itemize those as well (if you rent or plan to rent a unit, see Do You Need Insurance When Keeping Your Stuff in a Storage Unit?).
Store the Information Safely
Whether you do a paper or electronic home inventory, store a copy outside of your home. Most apps allow you to do this on their server. If not, you can store images and documents on free document storage platforms like Dropbox or Google Drive, or use an external drive.
If you’re doing your home inventory on paper, store a copy, including receipts, in a safe deposit or at a friend’s or relative's home.
If you want to avoid the mess of papers and the extra challenge of storing them safely, scan your receipts. If you don't have easy access to a scanner, take (clear) photos of them with your phone or camera.
Update Your Inventory Regularly
Even though an outdated inventory is preferable to no inventory, it is best to keep it current. You don’t need to jump on the computer or pull out your inventory every time you buy a new item. Just create a folder, take a photo of the object and receipt or scan it, and then jot a reminder on your calendar to revisit your home inventory.
How often you do so this is up to you. But don’t leave it longer than a year; otherwise, it becomes too cumbersome. Monthly or quarterly updates make the process more manageable, but always update your inventory before your insurance renewal date in case you need to adjust your coverage.
Review Your Insurance Coverage
Even if your insurance covers all of your items, a standard policy usually limits compensation for luxury items or collectibles. The optimal way to protect high-ticket items is to add a rider to your homeowner’s, condo, or renter’s insurance policy. It will mean an additional premium, but you'll be adequately compensated for a loss (see An Intro to Insurance Sublimits to learn more).
There are other items in your household that probably have low limits, such as:
- Prepaid cards
- Mobile devices
- Tablet computers
By working with your agent, you might be able to increase your coverage limit on these items, too.
An insurance review is not just a good time to take stock of the value of your possessions. It's also a great opportunity to revisit the value of your home. Appreciation, home improvements, and the rising costs of construction and renovation can create an insurance gap. Consider filling it by realigning your coverage with your property value.
No Time Like the Present
Whichever way you decide to proceed, start soon. There's no way to predict when disaster will strike, and the time it takes to put together a home inventory will be worth it if you find yourself with a major, unprovable loss.