What is the purpose of a home inventory? A home inventory list can make filing an insurance claim in the event of a major loss much easier.

Seventy percent of Americans have gone through a natural disaster at some point in their lives, according to research by Farmers Insurance. With that in mind, it’s surprising that nearly half of homeowners don’t have a home inventory.

What is the Purpose of a Home Inventory?

A home inventory list makes it easier for insurance companies to review a complete record of what was damaged, as well as the value, and determine what needs to be replaced in the event of a major loss.

Experiencing a natural disaster is stressful enough, trying to recall what was lost and proving what it was worth makes it that much more chaotic. Maintaining an accurate home inventory makes the insurance claims process smoother, so you can focus your energy on rebuilding and recovering from lost or damaged property.

There are a number of ways to create a home inventory. The end goal is to have an itemized list of all of your belongings. Jim Taylor, head of claims customer experience for Farmers Insurance, suggests starting with a video log, adding specific details about each item, and including any receipts in the file. He recommends storing the information in a safety deposit box and backing up any digital information to a safe cloud storage provider.

“It may not be the most Instagram-able way to spend a Saturday night, but taking a weekend to create a home inventory list is a great example of how a little precaution can go a long way in the future,” said Taylor.

How to Create a Home Inventory

You can keep your own list of valuables, backed up by a trove of digital photos stored in a cloud like Google Drive, Dropbox, or Apple.  In addition to photos of everything in your home, you might want to add some video shots that show where everything was located in a particular room.

For example, stand in the middle of your living room or bedroom and slowly turn in a circle as you videotape the contents of the room, narrating as you go along. Be sure to do this for every room in your home, plus the attic, garage and basement. If you have outbuildings on your property, like a barn, or if you’ve got a well-stocked patio or porch, or own a storage facility, you should make sure to fully document the contents of those spaces as well.

Fully documenting the contents of a space involves looking at each item within the room, everything from features like light fixtures, carpeting and appliances to everyday items like computers, clothing and jewelry. Log what year the item was purchased in, how much it cost, and how much it would cost to replace the item if you had to purchase it today. A thorough home inventory will provide the insurance adjuster who is assigned to your case with ample evidence to support your claim.

If you have any receipts for any larger, more expensive items, be sure to scan them or take a photo of them and store that in the cloud as well. If you have a list of the expenses, and know the approximate value and can back it up with images and video, you’ve gone a long way toward helping to file a claim should the unthinkable happen.

“Creating a digital treasure trove of images, video, receipts, and other items that prove value is a smart way to build your home inventory,” explains Ilyce Glink, award-winning financial journalist and CEO of Best Money Moves. “Should a catastrophe strike, you’ll be able to prove the insurance company what you owned and how much it cost to buy – and might cost to replace.”

Creating a home inventory is one of those tasks that can be accomplished in a few hours over the weekend for a relatively small home, and over a couple of days (part-time) for a larger property. The purpose of your home inventory is to make it a lot easier to prove value, should a physical catastrophe like a fire, flood or mudslide wash away the furnishings and belongings you’ve spent a lifetime accumulating.

Inventory Management Apps

Home inventory applications, like Sortly and Encircle, have been developed in recent years to help homeowners keep track of their belongings and quickly access inventory information in the event they need to report a loss to their insurance company. It’s a good option for homeowners who don’t want to spend the time creating and maintaining their own spreadsheets, but homeowners that use these apps should be mindful of how their information is being used and find out if it’s being shared with third-party marketers.

How to Maintain Your Home Inventory

Once you have an accurate home inventory, it’s essential to keep it up to date. It seems easy enough to immediately add each new purchase to your home inventory, but we make purchases quite often and this could quickly become a tedious task. Larger purchases, like furniture or appliances, should be added to your home inventory as you buy them. Smaller, less valuable purchases, can be added during an annual home inventory update.

Incorporate updating your home inventory into your regular spring cleaning, or set a separate calendar event to remind yourself to get it done once a year. Hopefully, you’ll never need it but if something does happen, you’ll be relieved to have an accurate home inventory list handy to give to the insurance adjuster.

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