Every year, one in 15 insured homes suffers a loss or damage large enough for the owners to file a claim, according to the Insurance Information Institute. The average claim was $8,793 according to a study from 2009-2013. That’s more than petty cash.
Yet fewer than half of Americans know what’s in their homes. Only 41 percent have a home inventory, according to a Feb. 2012 survey from the National Association of Insurance Commissions.
It’s important to have a home inventory for three reasons, according to the Insurance Information Institute. An inventory helps people buy enough insurance to replace what they own. It helps people get insurance claims settled faster. And it helps allow an income tax deduction for unreimbursed losses.
"Regular people, whether they're homeowners or renters, need home inventories way more than the wealthy, because they need the money more," said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the Insurance Inventory Institute, in a story from the Associated Press.
Start by making a list, any list. It’s better to have an incomplete inventory than nothing at all.
Many companies have inexpensive or free apps or software. Or use a pencil and paper or walk around the house with a phone’s video recorder on. Describe each item, where you bought it and its make and model. Add any sales receipts, purchase contracts and appraisals.
For clothes, count what you own by category like shirts or shoes, paying extra attention to any valuable pieces like jewelry and furs. They may need additional insurance since most policies limit jewelry coverage to $500, according to the N.A.I.C.
In the kitchen, open the drawer or look on the shelf and describe what’s there, like ‘a set of dishes for 12 including a dinner plate, bowl and so on,’ and when and where you bought it.
Appliances and electronic equipment are often big ticket items, and sometimes basic insurance doesn’t cover their replacement cost. The standard insurance policy limit for electronic equipment is $1,000, which might not be enough to cover all the devices like computers and tablets, according to the N.A.I.C. An inventory can help you know if you need more coverage. Record each device’s make and model and the serial number found on the back or bottom.
The cost of even basic items like toys, fans, and towels can rapidly add up, so make sure to include those in the inventory.
"People always say they don't have a lot of stuff. But if you add up the cost of your bed, with your mattress, mattress cover, bed frame and maybe a few suits hanging in your closet, some high-tech items or small appliances, and your bike or golf clubs, it easily adds up to thousands of dollars. And you're going to really depend on that money to get up and running again after a disaster," Salvatore told the A.P.
Remember to look in the garage and attic, too.
It can be daunting to start the inventory process, especially if you’ve been accumulating things for a while. The I.I.I. suggests you start with recent purchases then work backward, and don’t do the work by yourself.
"If your household gets involved, this project can be fun. Children can help by opening closets and drawers and listing what is in there," Salvatore said in a release.
Or, you can hire one of numerous companies to do an inventory for you. Try a Google search of home inventory businesses.
Once you’ve got an inventory, update it at least yearly. Also, whenever you buy anything valuable, add it to your inventory: take a photo, get the serial number and save the receipt.
Finally, make sure you store a copy of the inventory off your property. The N.A.I.C. said 28 percent of people who have made a home inventory don’t have a backup copy elsewhere.
“Don’t wait until after a disaster to think about a home inventory,” Salvatore said in a release. “Put aside a little time now to document all of your personal belongings. It will cost nothing but a little time to do.”