As a responsible homeowner (or at least I try to be….), I’m always on the look-out for the best and most efficient ways to protect my home from potential emergencies such as fires, natural disasters, and burglaries. And I’ve discovered that one way to to protect my home and loved ones from financial disaster is through a home inventory.
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Why You Need a Home Inventory
Before we dive into what a home inventory is, let’s first start on why you need one in the first place.
Picture this: Imagine returning home from vacation and finding your house completely destroyed by fire or flood. Or finding a window broken and your house broken into and everything stolen. How would you feel? Traumatized? Vulnerable? Not quite sure where to turn and what to do next? Luckily, it hasn’t happened to us, but I can imagine an overwhelming myriad of emotions.
How would you (or I) pick up the pieces and start over? Thankfully, you probably have homeowners insurance, but that doesn’t completely solve the problem. Why? Your insurance company will require that you describe exactly what needs to be replaced.
Think about that for a second.
Insurance companies put the burden of proof on you, the homeowner, to show ownership of your belongings in order to get reimbursed fully and quickly.
What does that mean? Before you receive any money from your insurance company to replace or restore the items in your home, you first need to prove to them that you actually owned these items.
So, if tragedy struck and you didn’t have an organized, written list of personal belongings, how would you handle reporting all these lost items to your insurance company? By memory?
Sure you could describe the big stuff, but what about all the little things? These little things should be overlooked. When combined, these little items add up and could cost you a lower insurance payout. Forgetting to list little items could potentially translates to losing a few thousands of dollars in your claim. Do you really want to leave money on the table?
And even if you had a rock-solid memory, do you really have the time and energy to make a list of all these lost items? After undergoing the gut-wrenching experience of losing your home, wouldn’t you rather spend time and energy caring for your family, such as finding temporary housing, and getting back to a normal life?
So:
- Is there a way to be prepared for these emergencies?
- Is there a way I can ensure that the insurance company will process my claim faster, for the right amount of money, and with less hassle?
Yes. By having a home inventory.
What is a Home Inventory?
In its simplest form, a home inventory is defined as: 1) a list of all the physical belongings located within your home (aka your “stuff”).
But a more comprehensive inventory is defined as also including 2) the belongings’s associated paperwork (aka your “stuff’s” paperwork) and well as 3) other important paperwork stored in your home (aka random “stuff”). Let’s go over these individually below.
1. Physical Items – aka Your “Stuff”
These are the physical items located within your property boundary. In other words, your “stuff”.
(BTW – watch just the first few minutes of this George Carlin skit about “stuff” in your house. Hilarious).
What items do you include on a house inventory? It should include all the physical objects in and around the house, including, but definitely not limited to the following.
- Furniture
- Electronics – tvs, computers, printers
- Mobile phones
- Linens and bedding
- Clothes and shoes
- Jewelry and other accessories
- Books
- Rugs
- Lamps, including ceiling fans
- Appliances – dishwasher, washer, dryer, oven, microwave
- Kitchen gear – food processors, blenders, toaster ovens, pots and pans
- Yard gear – lawn mower and snowblower
- Outside patio furniture and grills
- Fine china
- Antiques
- Heirlooms
- Artwork
- Musical instruments
- Window air conditioners and space heaters
Don’t forget the items stored in your garage, attic and sheds as well as items outside your house, like patio furniture and grills.
2. Item paperwork – aka Your “Stuff’s” Paperwork
A basic home inventory includes a list of the actual items as described above. It’s the minimum you should do to for a home inventory. But a more detailed, comprehensive house inventory also includes the essential paperwork associated with your “stuff”.
What do I mean by paperwork?
- Receipts documenting date of sale and price of items
- Receipts for any maintenance
- Warranties
Obviously you don’t need receipts for every items in your home. This paperwork is meant for your big-ticket items like appliances, televisions, and furniture.
Why do you need these as part of a comprehensive home inventory? For the insurance company to establish its value and give you the correct dollar amount for the item. This paperwork can ensure that you will get reimbursed fairly for your lost or damaged items.
So if you don’t save receipts and copies of your warranties when you buy big-ticket items, now is a good time start getting into the habit of saving and organizing these.
Just a side note – some belongings may not be automatically covered under your insurance policy even if included in your home inventory. Some items, commonly jewelry and artwork, need to be scheduled directly to the policy in order to be covered in the event of a loss.
3. Other Important Paperwork – aka Random “Stuff”
In addition to your “stuff”, you likely also have some essential paperwork stored at your house. And this essential paperwork, whether it be identification or financial, should be part of the comprehensive home inventory. Items such as:
- Birth certificates
- Passports
- Insurance policies
- Bank and financial information
- Property titles
- Automobile tiles
- Savings bonds
- Social security cards
- Wills and living trusts
You likely store these items in a fireproof, waterproof safe. These safes are very effective, but they are not completely damage-proof. Nor are they safe (pun intended) from thieves.
What if a flood is so severe that items (including you safe!) are swept away from your property? Or if the burglars physically take the safe hidden in the back of your bedroom closet? I hate to state the obvious, but it’s impossible to retrieve items from a safe that has been swept away by flood or tornado, or stolen by thieves.
But if you have a home inventory, you have documentation that these items exist and are easier to be replaced.
When Should You Compile a Home Inventory?
When is the best time to do a home inventory? Yesterday. Let’s face it, you never know when an emergency will occur. So the sooner you can complete your home inventory, the better.
As you can imagine, taking inventory of your entire house’s contents takes time. Don’t get overwhelmed. Come up with a strategy and stick to it. For example, set a goal to inventory a room every Monday night after work or after the kids go to bed.
And the good news? Once completed, you will never have to start from scratch again. Your home inventory only needs to be re-visited and updated once a year. The best times to update your inventory?
- The same time you re-evaluate your homeowner’s insurance policy
- After the holidays (i.e. January) when big ticket items are gifted and the receipts are still easy to locate
Don’t Have a Home Inventory Yet?
If you don’t currently have a house inventory, turns out you are not alone.
In 2012, the National Association of Insurance Commissioners found that 59% of Americans do not have a house inventory.
And of those who do actually have a home inventory, they are far from comprehensive:
- 50% of home inventories do not have receipts
- 30% do not have photos
- 30% do not have a back-up copy of their inventory stored away from home
Yikes.
If you don’t have one, don’t you think it’s time to get on it?
And if you do have one, is it comprehensive? Do you have receipts or photos? Have you stored a copy away from home? If not, it’s time to re-visit and update it. I’m in this bucket – we have a home inventory, but it doesn’t include receipts and we don’t have a copy stored away from home. It’s time I revisit my home inventory and update it.
A Little About My Home Inventory
Currently, we have a basic home inventory. We have pictures of all our physical items (aka our “stuff”). But as of the publishing of this post, we don’t have an inventory of our “stuff’s” paperwork and random “stuff.
And if it wasn’t for my father-in-law, I wouldn’t even have a basic home inventory (Thanks Don!).
Until a few years ago, I didn’t know even know what a home inventory was. But for Christmas, my father-in-law gave each of the children and spouses a a thumb drive as a present.
And honestly, at first I thought it was a weird gift.
I mean, I didn’t ask for a thumb drive for Christmas. We already had a bunch sitting in our junk drawer. And I didn’t exactly consider thumb drives as a “hot” Christmas gift.
After we opened the gift, my father-in-law instructed each of us to take pictures throughout our house. First, take a picture of each wall of our houses from floor to ceiling. Then, open each drawer and take a picture of its contents. Finally, when we were done with taking those pictures, we were to download them to this gifted thumb drives and put in a safe location.
When I got home, I went through the exercise, and tucked one thumb drive away into a safe place. And honestly, didn’t give it much thought.
Now I realize it was one of the most caring gifts a parent could give an adult child with their own home. He was giving us the gift of protection. The gift of love and forethought of our financial safety. To ensure that if tragic struck, we would be able to recoup the value of all our items and maintain financial security.
By gifting us a home inventory, my father-in-law gave us the tools to protect our house and our loved ones from potential financial disaster.
Pretty smart guy, eh?
I started thinking about our home inventory again when I saw this tweet earlier this year on HomeZada’s blog, a company that provides online & mobile home inventory and management solutions.
I read through a few posts on HomeZada’s blog and I realized a few things:
- What my father-in-law gifted us was called a “home inventory”.
- My home inventory was outdated (my home inventory was 3 years old, well before we had two more children!). It was definitely time to revisit.
- I failed to capture sales receipts, warranties and other important documents in our home inventory. This failure could result in us not getting all the money we should get from our insurance company if these items were destroyed in a disaster or burglary.
- There are other alternative tools to a thumb drive to create a home inventory. Hmmm… Was the thumb drive the best way to capture and organize our list of my family’s personal belongings?
I haven’t quite figured out my next steps yet. But I do know that I need to research my options and take action.
Why are Home Inventories Essential for Old Houses?
If you follow my blog, you know that I live in an old (i.e. 100+ year old house). I love old houses. So I was curious about how a home inventory relates to older homes.
What did I find?
While home inventories should be completed for all households, they are especially important for older homes.
Why? Two reasons:
- Older homes are more susceptible than newer construction to certain disasters like fires that can cause significant damage.
- Historic houses are commonly characterized by handcrafted details, like custom molding and stained glass windows. If damaged, specialized materials and extra labor are usually needed to restore the home back to its historical accuracy. As a result, historic homes have higher replacement costs.
We live in an American Foursquare home, a working-class architectural style known for modest adornments. We don’t have handcrafted details that would result in higher insurance claims for replacement costs. But since my house is over 100 years old, my house is more susceptible to a fire that could completely destroy my home beyond repair motivates me to ensure I have a comprehensive home inventory in place.
How to Compile a Home Inventory (Tools)
Here’s the good news and bad news. Creating a home inventory is like skinning a cat – there’s more than one way to do it. Luckily, there are a spectrum of tools at your disposal to compile your home inventory.
For example, you can create a home inventory using something as simple as writing down everything in a notebook and keeping receipts in a folder. Or, you can access today’s more advanced technology and utilize home inventory software or app.
What are the best tools to use to compile your home inventory? I’m afraid only you can answer that. You need to find the tools and systems that will work best for you.
Since completing a comprehensive home inventory takes time, effort and motivation, choose the tools and systems that will most likely help you actually finish pulling together your home inventory.
Below is an general overview of different tools and methods out there. Explore and see which might work best for you. Note that except for some of the more advanced home inventory software, you will likely need a combination of tools to capture all the documentation needed for a comprehensive inventory.
Paper
A home inventory can be completed using the old-fashioned way – with paper and pen.
Amazon has books filled with templates specific to facilitating a home inventory. Truth by told, I’ve not seen the inside of these two books and there are too few reviews to get a good handle on their quality. But I do like the idea of spending a few dollar to have a bound copy of my home inventory – no loose pages that can get lost.
If you prefer to use loose pages that you can subsequently compile into a three-ring binder, print out a free template created already online (like these from Real Simple Magazine or The Balance) and fill it out by hand. Or make your own template.
One of the cons of using paper to compile a home inventory is the need to make a copy. You will need to either scan or photocopy and place in a secondary location away from your house (for example, give to a trusted friend or relative who doesn’t live in your house). Why do you need to make a second copy and store away from your home? If you have only one copy and store it in your home and your house is destroyed by a fire or natural disaster, the inventory will be lost.
Computer Spreadsheets
Use a computer with a spreadsheet or word processing program (like Microsoft Excel) to record and store your inventory. Like the paper option, you can create your own, or find a template online. For example, United Policyholders, a consumer advocacy group, also offers a well organized free home inventory template in Microsoft Excel. Once complete, make you sure to send a copy to a trusted family member or friend either through email or via thumb drive.
Alternatively, you could use a spreadsheet on Google docs, which gives access to other family members to add and modify to the home inventory. Since Google docs is online (I assume via a cloud? I’m not tech savvy), you won’t need to worry about sending a copy to someone to hold.
Digital Camera or Mobile Phone
A written list or computer spreadsheet of your personal belongings is great, but taking photographs and video provides a more comprehensive snapshot (pun intended) of your personal belongings.
Why is it more comprehensive? Photographs and videos are:
- Faster to compile than a written list
- Easier to show the burden of proof of ownership to an insurance company
- More clearly describes the conditions of items for the insurance company to determine value
- Documents any difficult to describe or unusual items
While you could print out the photos, it’s more prudent to keep a copy on your computer. But, like the paper process, you need to store a copy away from your home.
Options? Upload online to a secure location – for example, Google Photos or iCloud. But some folks are uncomfortable with keeping important and sensitive information on the cloud. I can appreciate being leery of listing all their possessions, especially valuables and financial information, on line for hackers to discover.
So, other options? Save your photos and videos to two thumb drives. Place one copy in a secure location in your house (like a fireproof, waterproof safe) and send the other to a trusted friend or family member not living in your house. Note – if you do use thumb drives, consider upgrading to waterproof ones.
Scanner
Another tool in your arsenal to complete a comprehensive list of your personal belongings is a scanner. This tool is not meant to address the list of physical items in your home, but rather your “stuff’s” paperwork and random “stuff” such as:
- Sales and maintenance receipts
- Warranties
- Important documents such as driver licenses, social security cards, passports, credit cards, savings bonds, insurance
Admittedly, you could also handle this task by taking photos and video of the paperwork, but I thought it prudent to mention a scanner as an option nonetheless.
Home Inventory Software and Apps
There are a host of home inventory software options and apps on the market to help you create your home inventory easily and efficiently. An overwhelming amount of them, truth be told.
If you are looking for an app, check out The 7 Best Home Inventory Apps of 2019 which includes free or low-cost apps like Sortly, Nest Egg, and MyStuff. Or check with your insurance company to see if they have an app, or a recommended third-party app. Although be warned that if you use a specific insurance company app and then move your coverage to another insurer, you might not be able to transfer all your hard work to the new insurer’s app.
If you are looking for a program with extended capabilities, check out HomeZada. This digital hub for homeowners provides “management solutions for home maintenance, improvements and a full home inventory plan that lets customers catalog belongings, upload receipts, and create reports”.
Sounds impressive, right? And recently, HomeZada won first place at a national insurance conference for its innovative approach to helping homeowners manage and maintain their homes. I haven’t dug too deep into their capabilities yet, but hope to in the near future.
Summary
The emotional, gut-wrenching experience of losing a home from fire, burglary, or natural disaster is one I hope you family and my family never have to face. But if tragedy strikes, you can lessen the chaos and angst by being prepared with a comprehensive home inventory.
I read somewhere the following quote that resonated with me and is appropriate for this topic (and of course, I can’t find it now to give it credit).
Home is where the heart is…. AND all your stuff. Make sure you take care of it.
So I’m off to update my home inventory to a more comprehensive system. I’ll keep you posted.
Do you have a home inventory? If so, what tools did you use? What did you like or dislike them? (If you have any recommendations, I’d love to hear them!) If you ever had a homeowner insurance claim, did the home inventory make a difference in processing that claim?