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How can I create a household inventory for insurance purposes?

Getting Started With Your Inventory

Did you know that nearly 60 percent of Americans don't have a list or some other record of their belongings? According to a 2012 survey conducted by the National Association of Insurance Commissioners, 59 percent of those questioned have never inventoried their possessions. Of those that did, 48 percent did not keep receipts; 27 percent never photographed their belongings; and 28 percent do not have a copy of the inventory outside their home [source: Speer].

Inventories are important because on average, insurance companies will only reimburse a homeowner's contents up to 50 percent of the home's insured value, although some companies provide up to 70 percent [sources: Speer; CBS Detroit].

An inventory is not only record of the contents of your house and their value, but it is also a good indicator of whether you have enough insurance coverage [source: California Department of Insurance]. Most insurance policies give you a choice on how to insure your belongings. You can get either actual cash value or replacement cost coverage. Actual cash value will allow you recoup the amount you expect to get if you sold the items, minus the depreciation. Replacement cost coverage allows you to replace your personal property at today's market price. Replacement cost coverage is more expensive than actual cash value coverage [source: Allstate].

How do you get started creating an inventory? There are many ways to begin. I took the low-tech approach and listed my possessions in a notebook. Thanks for the help. I also took pictures. If you decide to write everything down and take photographs, use this handy home inventory guide. You can paste the pictures next to the appropriate descriptions. Some people videotape. Others put their information on a computer. If you really want to go high-tech, and store your info in a safe place, the Insurance Information Institute has free online home inventory software that makes it easy to create, update and store your information. There's even an iPhone App.