How can I create a household inventory for insurance purposes?

Losing everything in a disaster like a fire is devastating. But trying to remember the entire contents of your home is nearly impossible without a complete household inventory.
Losing everything in a disaster like a fire is devastating. But trying to remember the entire contents of your home is nearly impossible without a complete household inventory.
Lisa J. Goodman/Getty Images

Can you help me? Grab a notebook and a pencil -- we'll start downstairs. I'll take the pictures and put them on a stick drive later. Be careful. Don't trip over my cat Mike Moo. I know, cats aren't supposed to be the size of a rocking chair, but he's light on his feet and he loves my Great Dane. If the Dane had a pouch, Moo would crawl inside. Okay, let's begin. Write what I say as we go along.

  • Suit of armor: $800. No, it's not a Halloween costume, but a late 19th-century replica. Not many people own a suit of armor, but I'm not many people. The authentic suit I wanted went for $4,000 at auction -- way too pricey.
  • Stuffed peasant: $35. Don't ask. Mike Moo isn't even impressed, and he hates birds. Let's move on and never speak of the peasant again.
  • 19th century tin bathtub: $250. Used in Victorian times when bathrooms were still science fiction. It doubles as a cat bed. Animals in this house get everything.

I haven't lost my mind. In fact, I'm lucid, although lucidity is a matter of opinion. What you and I are doing is taking an inventory of my valuables -- or not so valuables -- in case I have to make an insurance claim. The inventory is documentation that I can use in negotiating replacement costs with the insurance company.

Creating an inventory like this is time consuming, but it's well worth the effort. Robin Kaufman knows all too well the importance of a home insurance inventory. In 2007, Kaufman lost her house when wildfires swept through her San Diego neighborhood. The day before, Kaufman videotaped her home simply to share it with a friend who lived on the East Coast. After the fire, Kaufman used the videotape as a record of her possessions when filing her insurance claim [source: California Department of Insurance].

Listing all your possessions after a fire, burglary or some other disaster can be an emotional, gut-wrenching experience as you try to remember everything that you owned. An inventory can take some of the angst out of the process. Go to the next page and learn some helpful hints on how to 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.

Creating a Home Inventory Step-by-Step

Let's begin. The first thing we'll do is write down all the expensive items including jewelry, furs, and collectibles. I don't have any furs or jewelry, but you might. Let's not forget to list toys, old record or comic book collections, CDs, video games and clothing [source: Insurance Information Institute].

There are a couple of ways to create a list. We're going to write down the belongings in each room. Some people might choose to categorize their possessions. Others might decide a combination of the two. Whatever way you decide, make sure you include general appliances such a dishwasher or air conditioner; household items including carpets, rugs, bookcases, chairs, clocks, mirrors; living room furniture; dining room furniture; clothing; the contents of all the bedrooms, including linens and night tables; kitchen tables and chairs; patio furniture; everything in the garage, home office, library and den [source: Insurance Information Institute]. You get the picture.

As we go from room to room and item to item, we will take photographs. Others might decide to videotape. We'll add the photos next to the written descriptions. Are you still writing? Thanks. Digital cameras are great for taking an inventory. If you have a film camera, scan the photos into your computer [source: Insurance Information Institute].

No matter how you're going to record your possessions, open drawers, cabinets and closets. If you're videotaping, narrate what you see as you go from room-to-room, closet-to-closet and drawer-to-drawer [source: Insurance Information Institute].

If you can, keep all your receipts and serial numbers of the big-ticket items. Once you complete the inventory, it is extremely important to safeguard the information. You can purchase a fire resistant box or safe; give the inventory to a relative or close friend; lock the document up in a safe place at work; give the list to an attorney or accountant; or put the inventory in a safe deposit box at your bank. In addition, make sure you update at least four times a year [source: California Department of Insurance].

The inventory of the library is finished. Let's move on to the living room!

Author's Note

I'm still creating my home inventory, and I hope you are, too. In fact, I just learned my digital camera takes videos. Obviously, I'm not the photographer in the family.

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Sources

  • Allstate Insurance. "Personal Property Coverage." (March 28, 2012). http://www.allstate.com/home-insurance/personal-property-coverage.aspx
  • California Department of Insurance: "Home Inventory Guide." (March 28, 2012). http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0040-residential/upload/HomeInventoryCombined2008.pdf
  • California Department of Insurance: "Insurance Commissioner Jones Conducts Home Inventory, Reminds Homeowners to be Prepared." July 7, 2011. (March 28, 2012). http://www.insurance.ca.gov/0400-news/0100-press-releases/2011/release092-11.cfm
  • CBS Detroit. "6 Questions to Ask When Shopping for Homeowners Insurance." Feb. 18, 2012. (March 28, 2012). http://detroit.cbslocal.com/2012/02/18/6-questions-to-ask-when-shopping-for-homeowners-insurance/
  • Know Your Stuff. "Taking Home Inventory." (March 28, 2012). https://www.knowyourstuff.org/iii/viewOnlyNoLogin.html?page=front_take
  • Speer, Pat. "Homeowners Unprepared for Weather." Insurance Networking News. March 26, 2012. (March 28, 2012). http://www.insurancenetworking.com/news/naic-homeowners-property-claims-30122-1.html