Creating an inventory of your belongings can be a daunting task. Unless you’ve gone the minimalist route, you’ve probably accumulated a good bit of stuff over the years and documenting it all will take some time. This article will help you understand why an inventory is important, figure out how much documentation you really need, and outlines a simple process for going about creating an inventory.
Why Should I Create An Inventory?
Insurance is probably the number one reason most people create a home inventory. Knowing what you have, what it is worth, and being able to offer proof of possession (photos of your belongings in your home, receipts, etc.) are important when filing a claim. In cases of catastrophic damage, such as a house fire, the last thing you want to do is to try to remember everything you had.
A comprehensive inventory can also help you in determining the right amount of insurance coverage needed. In our experience, many people are both over and under insured.
The contents portion of your policy may have coverage that exceeds the total replacement value of the items in the home. Yet you still may be underinsured when it comes to specific items, as many policies have smaller coverage limits for certain categories of items, such as jewelry, musical instruments, and computer equipment. It is also not unusual for there to be a limit on the maximum reimbursement amount for any single item in one of these categories, as well as category-specific deductibles. For example, a policy may insure a home’s contents for up to $250,000, but only $5,000 worth of jewelry is covered and the maximum reimbursement for a single piece of jewelry is $2,000. If someone breaks into your home and steals a $10,000 ring, your insurance company will only reimburse you $2,000 minus the deductible.
Knowing exactly what you have, what it’s worth (by category, by individual item, and in total) is the only way to make sure you are properly insured. One of the benefits of our own home inventory application, Home Inventory, is that it allows you to enter your policy details to find out if there are any gaps in your coverage and will help you determine if you have the right amount of coverage for your belongings.
A good home inventory system is more than just about insurance. It can help you stay organized and reduce clutter. You can use it to keep track of warranty information, store receipts and product manuals, keep notes on repairs and modifications, and other important information regarding your home and belongings so that it is readily available in a single place when needed.
Collectors can record details of their collections, such as documenting provenance and valuing the collection as a whole, as well as each of the pieces individually. The latter comes into play when a complete set, such as all of the player cards for a baseball team in a specific year, may be worth more than the total value of the individual items in the collection if they were sold separately.
Home inventories can also be used for estate planning as a way to designate heirs for particular items.
What Information Should I Record?
The information you need to record for each item depends on the type of item and what you want to do with the information. We conducted interviews with a number of insurance professionals and one theme that emerged is that you do not need to keep a lot of detail about common items that would be expected to be found in your home. For these types of items, like clothing and dishes, you may only need to record the approximate number you have and average value (example: ten shirts worth about $30.00 each).
For items that are less common, more expensive, unusual, rare, or that are a part of a collection, you will need more documentation. First and foremost, you want to be able to refer to each item as specifically as possible. Record the name, make, model/style number, serial number, and any other information that uniquely describes the item, where applicable. Photos of the item in your home or on your person, in the case of jewelry or clothing, along with receipts, can help establish proof of possession, which may be asked for in the event you need to make an insurance claim. Usually, a single photo will suffice, but if you need to take multiple photos at different angles for a given item in order to establish it is what you claim it to be, then do so.
Documenting when and where you purchased each item, as well as how much you paid for it, is necessary for calculating the value of your inventory. For antique, extremely expensive, and rare items, you may want to have them appraised and keep a copy of the appraisal. Many insurance companies also require a separate endorsement (sometimes referred to as a rider) for these types of items, so you will need to check with your insurer if you possess any items of this type.
For collections and older/antique items, consider documenting the provenance, where possible, and condition of each item. Modifications, repairs, and restorations should also be recorded. You might also find it helpful to document the specifications, color(s), materials, and other characteristics of these items.
Building Your Inventory
The more stuff you have, the longer it will take to inventory it properly. There’s no getting around this. But you can make the task go much more smoothly if you use a consistent, methodical approach.
The first step is to make a list of all of the locations in your home where you have belongs. This includes the rooms in your home, along with other spaces, such as the attic, porch, garage, lawn, or shed. Don’t forget to include any automobiles and other vehicles you may own.
Once you’ve recorded all of the locations, pick one to start with and begin listing all of the items in that location. Just capture the basic identifying information (name, make, model, serial number, etc.) and take photos where necessary. In the case of groups of common items, where you have more than one of a same type of thing (clothing and dinnerware, for instance), just document the quantity and estimate of the average value of an item in that group. For these types of items, it is enough to just take a photo of the group as a whole. You don’t need to photograph each pair of socks that you own.
At this point, you will want to dig up any documentation you have on the items in that location (receipts, warranties, appraisals, etc.) and add them to the record of the appropriate item. If you do not have a purchase record for a particular item, that’s okay. Try to took it up online to get an idea of what it may be worth and record that value for insurance coverage purposes.
Many companies now make product manuals and warranty information available online, so you may want to download this information to add to your inventory as well.
Once you’ve finished one location, move on to the next until you are done. You don’t have to do it all at once. This process makes it easy to come back and pickup where you left off.
Keeping It Up To Date
If you’re like most people, you add new possessions and get rid of old ones on a regular basis. This means you will need to keep your inventory up to date for it to be of any use.
Some people prefer to update their inventory as soon as they’ve acquired a new item or disposed of an existing one. If you’re this type of person, then you already have your update strategy. For others, it might be better to make your updates in bulk.
If you take the bulk approach, set aside a regular time to update your inventory – maybe once a week or even once a month. Keep a list of your new acquisitions and what you’ve gotten rid of as you go along so you don’t have to rely on memory. You will also want a place to temporarily keep receipts and other documentation so you can add copies to your inventory later. Our Home Inventory offers an Inbox where you can store digital receipts until you’re ready to add the item to your inventory. Then, when it’s time to do your updates, go through and add each new item along with the necessary documentation to your inventory and remove the things you’ve gotten rid of.
Keep A Backup Copy
A home inventory isn’t very useful if you can’t put your hands on it when you need it. If you created your inventory on paper, make a copy to give to a trusted friend or relative, or to keep in a secure place outside of your home, such as a safe deposit box. Keep in mind that you will need to make an updated copy and store it every time you make changes to your inventory. Keeping your inventory on a computer in a spreadsheet or using special-purpose home inventory software can make the entire process much easier.
If you do decide to keep your inventory on your computer, make sure you keep a backup copy in a secure place outside of your home. Our Home Inventory app can backup to a synced folder that syncs your data to the cloud, such as Dropbox or iCloud Drive, or to your iPhone, iPad, or iPod Touch. You can also print a hard copy of your entire inventory or save it as a PDF to store somewhere else.
If you use a cloud-based service for your inventory, make sure you can readily download your inventory in a commonly used format (such as PDF or a Microsoft Word document) in case the service shuts down, experiences data loss, or is temporarily unavailable.
The rule of thumb here is to keep at least one other copy of your inventory in a separate location should something happen to the original.