Last Updated on March 5, 2022
In all honesty, cataloging all of my family’s possessions sounds as exciting as watching paint dry or grass grow. Don’t you agree? Creating a comprehensive home inventory is time-consuming and overwhelming (if you aren’t organized). But after reading up on the topic, I found 12 compelling reasons to motivate me to undergo the torturous process of logging all our personal belongings and create a home inventory.
This post contains affiliate links, including but not limited to, Amazon Associates. As such, I earn from qualifying purchases. Full disclosure located here.
Before we start, two items:
- If you don’t know the basics of a home inventory, read this post “What is a Home Inventory“.
- I’m a homeowner, far from an expert. I found two experts in home finance (Ilyce Glink at ThinkGlink) and home management (Beth at HomeZada) who deserve credit. Their videos are linked later in this post.
1. Insurance Claims
If your personal belonging are stolen or lost in a natural disaster, a home inventory will ensure that insurance claims are processed faster, completely, and with less hassle. Why? Insurance companies put the burden on you, the home owner, to provide documentation of your belongings in order to get reimbursed fully and quickly.
The best way to provide that documentation or proof of ownership? Through a home inventory.
A comprehensive home inventory provides a snapshot of all your belongings – large and small items. Sure you will remember the large items – appliances, snow blower, tv, etc. But will you remember the small stuff? Fifty pairs of shoes? Your kid’s complete Disney DVD collection? That small stuff that seems insignificant, but in reality, adds up to a significant sum? If you forget what you own (including the small stuff) and don’t report it in your claim, you won’t get reimbursed for it.
And not only with a home inventory help get you complete reimbursement for your personal belongings, a home inventory also speeds up the claims process. If your house is destroyed and you are living in a hotel or with family or friends, don’t you want your claim paid as quickly as possible so that you can rebuild?
Before you start your home inventory, Inspection Support Network advises reaching out to your insurance company tip on specific reimbursement requirements. Some insurance companies need receipts for items, while a photograph and/or serial number will be sufficient for others.
2. Properly Insured?
Do you know what your limit is on your homeowner’s policy? Have you looked at the limits on your home insurance policy and wonder how it was determined? (I’ll admit it, I have no idea why we have our particular limit.)
But after reading this statistic from Nationwide Insurance on homeowner insurance, maybe I should be questioning my limit….
About 2 out of every 3 homes in America are underinsured. The average underinsurance amount is about 22%, though some homes are underinsured by 60% or more.
Nationwide Insurance
What does that mean? According to Nationwide:
“Millions of American homeowners are at risk of major financial loss should a disaster ever affect their home. Homeowners in these unfortunate situations find themselves responsible for tens of thousands of dollars of unexpected out-of-pocket costs to rebuild their house. Many of these homeowners are financially unable to rebuild a house like the one they had prior to their loss.”
(As a side note, when I read this I was appalled. WTH? You mean to tell me that even with insurance, we may not be able to rebuild our house because we’re underinsured?)
A home inventory can help determine if you have purchased enough insurance coverage. How? Provide a copy of your completed home inventory to your insurance agent and ask them for their opinion. Ensure that you haven’t underestimated the worth of all your possessions. Because if you have and disaster strikes, you may have an insufficient limit on your policy to cover the cost to replacing all your belongings.
3. Home Maintenance Calendar
Part of a compiling a comprehensive home inventory includes making note of appliances and lawn gear that require preventative maintenance and upkeep. And it’s hard to keeping up with what needs maintenance and when.
Use your home inventory to create a maintenance plan to ensure these items and your home continues to run smoothly.
4. Declutter
The purpose of compiling a home inventory is to document the items that stay in your house, but why not use an inventory to help decutter your home? How? In two ways:
- Declutter while inventorying: As you work through creating your home inventory, remove items you no longer use. Digging through a kitchen cabinet to list all your gadgets and realize that you haven’t used that bread maker in 5 years? Get rid of it. I love this idea of killing two birds with one stone.
- Declutter after inventorying: Imagine a huge list of your personal belongings in front of you that you can review and highlight items that you no longer use. Now imagine pulling all those items out of your home and hosting a garage sale or taking them over to consignment shop for a little extra cash in your wallet.
5. Curb Spending
Trying to cut back on your spending this year? Fighting the urge to drive over to Home Goods to see the latest finds? Interested in a more minimalist lifestyle? This reason to create a home inventory can curb impulse spending.
Print out a copy of your inventory and keep it in a handy spot. When you have the urge to spend, pull it out and take a look. It will likely be pages upon pages long. And it will make you realize the astounding amount of stuff you already won and how much you have spent over the years. You’ll realize that maybe you don’t really need anything else.
6. Streamline Moves
Your home inventory can act as your packing/ moving list. How?
One, this list can be used to estimate how big (or small) your move will be and guide you to getting enough resources. Having a list of personal belongings helps you estimate how many boxes you need, how big a moving truck, how many movers, etc…. We have all done it. Either we don’t have enough boxes (or help) to efficiently move into a new home. Or we have way too many boxes or spent way too much money paying an entire staff of movers when we really only need a few helping hands.
Second, if you hire movers or use a storage facility, this inventory can act as a valuable tool in case of loss or damage by the movers or storage facility. Or even ensure that everything that moved from one house actually made it to the other house.
7. Downsizing
This reason to create a home inventory is related to moving, however, with downsizing there is an extra step of deciding what is going, and what is staying (or being sold). A home inventory is a valuable resource to evaluate where you have excess and where you can cut back without having to dig through the actual house.
I imagine a written list of personal belongings is especially helpful when dealing with an older family member moving into assisted living. It’s easier to sit and objectively discuss the best way to downsize with a written list in front of both you and the older family member.
8. Life Status Changes
Life happens.
Sometimes it’s pleasant and joyous, like a marriage or partnership. Having a home inventory can aid the process of combining households by determining duplicate items (who needs 2 lawn movers and 2 toasters?). Imagine selling or donating those duplicate items to fund a celebration party for your union, or for a romantic getaway?
And sometimes the stuff that happens is unpleasant and nasty, like divorce. Wouldn’t it be nice if there was an objective list of assets and possessions to divide and help ease the process?
9. Estate & Financial Planning
A home inventory is a valuable tool when it’s time to create your will or trust. One, it provides the executor of your will or trust a comprehensive view of all your worldly possessions – whether these possessions are in your house or a safety deposit box at the bank. This detailed list ensures that nothing slips through the cracks.
Second, this list serves as a tool to assign certain items to beneficiaries. For example, you can use the home inventory to clearly bequeath heirlooms like jewelry, artwork, and fine china in writing, which removes ambiguities and lower the chance of fighting between family members (C’mon, we all know this happens…)
10. Raise Home Value
While a home is a place where we make memories and let down our hair, a home is also the largest financial purchase you’ll probably ever make. And it’s important to keep track of the money you put into the house over the years for improvements to maintain this asset.
Documenting purchases related to home improvements, such as new appliances and renovations, could help raise the value of your house and sell it at a higher price down the road.
11. Protect Second Home
Do you own a second home or vacation home that you rent out? A home inventory is an essential tool especially, with fully furnished rental property.
Why? You have documentation of which items you own, and in what condition they existed prior to renting it out. If your renters steal or damage your home or the items in it, you have a record to help recover the costs associated with replacing or repairing your home and those items.
12. Peace of Mind
Creating a home inventory provides peace of mind. You can rest easily knowing that you are financially organized and have prepared for natural disasters or burglaries that can devastate your home. A home inventory removes a bit of the angst, stress and chaos from these traumatic events and helps you and your family return to normal life as fast and easily as possible.
With all these reasons to create a home inventory, why haven’t you started one?