You may have home and flood insurance, but if you ever have to file a claim you'll need an inventory of personal property to identify what's damaged, destroyed or stolen.
Insurance companies may ask for proof of ownership before they reimburse you for that missing laptop you just bought a month ago or your waterlogged collection of antiques and artwork in a flooded room. However, nearly 6 in 10 consumers don't have a home inventory, according to a survey by the National Association of Insurance Commissioners.
"The homeowner is ultimately responsible for proof of ownership," says Charles "Chic" Craddock, the owner/agent of Craddock Insurance Services in Charlottesville, Virginia. "Insurance agents aren't obligated, though if I'm asked to help I will go out and help them do an inventory. That's part of being a good neighbor, providing good service. But it is up to the homeowner. If they have valuables out of the ordinary, they need pictures and documentation. Has it been appraised? Is there a purchase receipt? It's better to get this done before a tragedy strikes."
"If somebody suffers a fire, a theft or a loss, obviously an insurance company doesn't want to add to the stress," Craddock continues. "Most insurance companies don't nitpick But yes, we may ask for proof that you really had six plasma TVs that burned up in a fire."
Here's how to take inventory of your possessions.
- Photograph everything of value. Take pictures with your phone or camera of all the rooms in your house so furnishings and belongings are clearly visible. Get close-up photos of collectibles, jewelry, rare books, antiques, appliances, tools, electronic equipment, china, expensive cooking equipment and specialty appliances such as an espresso machine or wine chiller. With electronics, take shots of the serial numbers as well. If your camera has a setting that stamps the month and date on your photos, use it. Include close shots of any special vehicle or boat upgrades such as stereo gear or customization.
- Reappraise artwork and collectibles every few years. Artwork and collectibles often appreciate in value; staying current means you're sure to have enough insurance coverage.
- Check with your agent about whether you need extra coverage or maybe even a separate policy to cover high-value items. "Anything out of the ordinary, we encourage documentation" says Craddock. "Some policies include protection for add-on items: sometimes you have to increase a policy to cover that extra exposure. Better to ask."
- Use a video camera if you're pressed for time. Walk through the house with a video camera, describing your belongings as you go along. Just know that flipping through photos and a list with your insurance adjuster will probably be faster if you have to file a claim. Otherwise, there will be a lot of reviewing and pausing a long video clip of your house tour. "Paper documentation and pictures are easier than video, but we work with either one," Craddock says.
- Write down a description of each item. Include the brand name as well as any serial numbers. Note the date you bought each item, the price paid and a fair estimation of its current condition. Save receipts for major purchases and keep them in the same file with your photos, Craddock advises. Scan the receipts to make digital copies or take a close-up photo of each so the price is legible.
- Save the inventory list on your computer. Store it on an external storage such as a USB thumb drive, print a hard copy and store it in a fireproof media safe or deposit box at the bank. Some insurance companies will store the information for you. "We have digital archive capability so any of our clients can bring in their images and we store the data for them on a secure network," Craddock says.
- Review and update your list at least annually, and immediately when you acquire a valuable item. "We're thrilled if they update at all," says Craddock, who admits he hasn't updated his own inventory list in a while. "Any time you acquire an expensive item, I'd update the list. If you get an antique, you have to prove why it's worth the money being documented. A lot of jewelry items come up, too that's usually where we get the most questions. So, if you think it's worth more than $7,000, get an appraisal."
Craddock explains another reason insurers encourage people to make a list of possessions and take pictures of their rooms. "When people have had fires and lost their entire home, they're emotionally distraught and trying then to make a list of everything you owned is a huge undertaking," he says. "So just to save people the pain of trying to recreate a list from nothing is a good reason to make an inventory. A list will save a lot of headache and heartache."
The NAIC offers a home inventory checklist to help you account for everything.
Interview with Charles Craddock, owner/agent, Craddock insurance Services, Virginia. http://craddockinsurance.com/about-us/our-team/
Home inventory checklist, National Association of Insurance Commissioners. http://www.insureuonline.org/home_inventory_checklist.pdf
Most Americans Haven't Protected Their Possessions from Severe Weather Threats. National Association of Insurance Commissioners. http://www.naic.org/Releases/2012_docs/most_americans_havent_protected_possessions_severe_weather.htm