Friday, August 21, 2015

Money Crashers: How to Create a Home Inventory

An item that's been on my to-do list for a while is to create a home inventory. For those who aren't familiar with this term—as I wasn't, until I read about it in the Money Talks Newsletter—a home inventory is a list of all, repeat all, your belongings, along with estimates of their value. According to MTN, you need to be able to document all your possessions, "down to your last sock," in order to file a home insurance claim. If you don't name the items, the company won't pay you for them.

Now, when I first read that, it didn't sound right to me, because I know that on my home insurance policy, I have a specific dollar amount of coverage for my personal belongings. So if my house were to burn to the ground, wouldn't the company just pay me that amount? But when I checked my insurance company's page on "recovering after an event," it said to "Prepare a list of damaged or lost items for your adjuster, and if available, give the adjuster receipts for those items"—and it recommended preparing a home inventory ahead of time "to remember items...that can be easily overlooked or may have been destroyed." I realized at that point what the flaw in my reasoning had been: a disaster wouldn't necessarily destroy all our belongings. Unless the whole house really does burn to the ground, or get carried away to Oz by a tornado, at least some of its contents would probably survive, and naturally the insurance company wouldn't want to pay out for anything we still owned. So yeah, we really do need to be able to give them an accurate list.

However, cataloguing every single item in my house just seemed like such a monumental task that I kept putting it off. But eventually, I got the bright idea that I should just write about this topic for Money Crashers. That way, in the process of researching the article, I could learn about—and possibly try out—all the various apps and tools that are available for doing a home inventory, and perhaps I'd hit on one that would make the whole process vastly easier.

Sadly, it didn't work out that way. I learned that there are indeed a vast assortment of free apps and spreadsheet templates you can use to make a home inventory—but none of them can get you around the basic problem of having to go from room to room, writing everything down. I went so far as to set up an account for Know Your Stuff, a free Web-based application provided by the Insurance Information Institute, and I was scared off at the first screen, which asked me to provide a whole host of details, such as purchase date and model number, about each object I wrote down—details that, in most cases, I'd never known, and definitely couldn't document.

Some apps promise to make things a little easier by letting you just scan bar codes on your belongings and have the program pull up the details from the Internet, but there are three problems with this:
  1. most of our belongings don't have a bar code on them;
  2. the ones that do, like books, are not high-value items, so it would make a lot more sense to say "800 books, estimated value $10 each" rather than catalogue them individually; and
  3. even if we wanted to scan bar codes, we'd have to have a smartphone to do it, and we are the last living middle-class couple in the country who don't.
In the end, I concluded that the easiest method would be to go through each room, photographing its contents—getting a few shots of the whole room that take in all most of it, and going in for close-ups on anything particularly big or high-value. This saves the trouble of handling every single item and try to come up with minute details about it; I can just rely on the photos to guide my memory. I can supplement these photos with or other documentation for the relatively big-ticket items, like our computers and the one set of really nice cookware we got as a wedding present. But since most of our belongings were just picked up on the cheap at yard sales and such, I figure the photo should be enough.

Even taking photos of all your belongings isn't all that quick a process, but I figure I can make it more manageable by breaking it down—say, shooting one room at a time. Then when I've got all the photos taken, I'll store them on my Google Drive, where I can reach them in the event of an emergency that destroys my computer. And once I've got the photos safely stowed away, I can start filling in the details with any other documentation I have available.

So that's what works best for me. But of course, your mileage may vary, particularly if you have a smartphone. If you want to learn more about the various other alternatives for making a home inventory, check out the full article: How to Create a Home Inventory for Insurance – Methods, Apps & Checklist

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