Although lenders typically require borrowers to purchase homeowners insurance, few want to think about the impact of a catastrophic fire or extreme weather event. That may be why less than half of people who own single-family houses complete an inventory list. Of those who took an hour or so to put a list together, few circled back to update it. Rather than learn why you should take a home inventory for insurance purposes the hard way, consider the following.
What is a Home Inventory List?
A home inventory is a list of the valuable and everyday items members of a household possess. These products are kept inside the family home and may be covered by insurance in case of loss.
Property owners may go from room to room with a clipboard or electronic device and write down the name, number, and value of personal possessions. Sometimes, people simply take a few moments to create a 360-degree video highlighting major appliances, furnishing, common items, and high-value items stored in closets or lock boxes.
Top Reasons Why You Should Take a Home Inventory
Whether you take the low-tech approach of writing down the inventory and keeping receipts or make a video, the list could prove invaluable. These are reasons why you would be well-served to create and maintain a current record of home inventory.
1. Fast-Tracks the Claims Filing Process
Insurance companies generally require a full accounting of your valuables. This holds particularly true if your claim involves several big ticket items, such as smart technologies and upgraded appliances. A contents list lets you fill out the claim and provide the adjustor with a copy. You won’t need to spend time trying to remember everything or researching personal property values.
2. Provides Proof for Your Claims
Imagine you kept several thousand dollars in cash on hand for an emergency. Perhaps you recently invested in artwork. How would you prove to the insurance company these items were destroyed in a tragic fire? Without documentation, the insurance carrier would likely deny the claim. Having a thorough 360-degree video or paper receipts supports the fact that you suffered a financial loss.
3. Maximize Your Claim Payment
Without the full record, it’s easy to forget about sometimes expensive items. Imagine waking up and remembering an heirloom that was tucked away in the attic months after the claim was settled. A clear, concise accounting of all your personal property helps prevent such oversights and maximize the payout.
4. Know How Much Insurance Coverage to Purchase
It’s not uncommon for homeowners to select a policy that covers personal property by percentage. You may choose a policy that covers the home’s real estate value, and that figure drives the inventory amount. But too many homeowners find themselves underinsured because real estate values and replacement costs are two entirely different conversations. By knowing true replacement costs and the actual value of the home’s contents, you can make an informed decision about insurance coverage.
Estimate Your Replacement Cost with Douglas Cost Guide
The process of calculating adequate insurance has never been easier. The Douglas Residential Cost Guide provides user-friendly, up-to-date information that can be accessed online. This trusted resource is also widely accepted by insurance companies. If you are concerned about being underinsured, get an accurate estimate by using the Douglas Residential Cost Guide today.