Home Inventory Is Crucial After Fire, Theft

It’s easy to put off the task of making a complete inventory of your household possessions. But if you’re the victim of a fire or burglary, you’ll soon discover that:

--If your television set is stolen, not knowing the make, model and serial number makes recovering it very unlikely.

--Not having a complete description of your jewelry and the value of each piece makes it difficult to collect from your insurance company after a loss.

--If you didn’t keep track of computer equipment, artwork and other valuable possessions acquired since you bought insurance, you may be underinsured--and not reimbursed for everything you lost.

Everyone’s heard horror stories of people fighting protracted battles with insurance companies, trying to prove the extent of their losses after theft or fire. If you don’t have documents or photos, you can be in for a hassle.

If the stolen item was a gift, you may need to have the gift-giver verify and describe the gift in writing. If you bought or inherited a particular item, your insurance company may require letters from friends or non-family members who can state where they saw the items in your home and, if possible, when, where and for how much they were purchased. Each letter writer must include his or her name, address, phone number, and how long he or she has known you. As you can imagine, providing this kind of proof can be a hassle.

Different companies and claims adjusters require different amounts of proof, but if you have an up-to-date home inventory, photos or videotapes of the items in your home and other supporting documents, you should have no trouble collecting the full amount of your claim.

Creating a comprehensive home inventory does not need to be a daunting task. Take it one step at a time.

Start With the Right Tool

When you first buy homeowner’s insurance, your agent may give you a little inventory form or booklet to list all your possessions, room by room. It’s better than nothing, but there’s not enough room for complete information about each item, and it’s messy to update.

A computer is the best way to keep your home inventory complete and up-to-date. If you’re ambitious, you can use a database or spreadsheet program to create a home inventory template from scratch. A simpler approach is to buy a low-cost home inventory software program.

Record Essential Information

Start by walking around your house with a pad of paper, jotting down the most valuable items you own, room by room. List individually any item worth more than $25 or $50.

Start with big things like furniture, expensive rugs and artwork. Be sure to include jewelry, articles of clothing, stamp or coin collections, CD and record collections, silver, tools and electronic equipment. You’ll be amazed at how many things you own and how quickly their value adds up.

Once you’ve gone through every room, sit down at a computer or with a notebook and begin recording the essential information about each item.

What is essential? The short answer is: anything your insurance company or the police will want to know in case of fire or theft. Here’s a guide:

--Complete description including make, model and serial number (if any). The make and model will help you justify the estimated value of the item when you’re dealing with your insurance company, and the serial number helps police identify and recover stolen goods. Record any other identifying marks on the item--for instance, if you engraved your name. For things like silver, give an accurate description, including the name of the pattern and number of pieces in the set.

--Location. This will help you identify what you’ve lost if a fire or theft affects only one area.

--Location of ownership document, sales receipts, owner’s manuals and repair bills. This will help you quickly justify the amount of your insurance claims.

--Location of photos or videotapes. Taking close-up photos or videotapes of your belongings are excellent ways to prove to your insurance company that you actually owned a particular item, as well as to show its condition. This is especially important for jewelry, art, antiques and one-of-a-kind items. Unless you live in a mansion or have extensive collections, it shouldn’t take more than an hour.

--Value, including cost at time of purchase, current value and replacement cost. It’s essential to record the value of each item you own. For insurance purposes, the replacement value may be the most important, because most policies guarantee the replacement value (rather than the cash value) of the things you lost. Sometimes this is simple, especially if you purchased the item recently or it’s something that you can check by pricing similar items--for example, a sofa bed or teak bookcase--in classified ads.

For antiques you’ve inherited, or stamp or coin collections however, you may need an appraisal. It’s too hard to assign value after they’re gone--if the silver you inherited from your grandmother is gone, how can it be appraised?

To find a professional appraiser, check the Yellow Pages. Expect to pay anywhere from $50 to $150 an hour for a written appraisal at your home. If additional research is necessary to determine the value of an item, the appraiser will usually charge for that too.

Store Records in Safe Place

Having the best records in the world won’t help if the records are destroyed with the rest of the house. Keep a copy of your inventory and all supporting documents in a safe place, such as a fire-resistant file cabinet, the freezer (one of the most fireproof places in your home) or a safe deposit box. If possible keep copies in at least two locations--for example, at home and at work.

Keep Record-Keeping Habit

Once you’ve invested the time to set up your inventory system, updating your records should require only a few minutes of time and effort each month. Update your inventory whenever you obtain a valuable item or when you fill out the registration or warranty card. If that’s convenient, keep a large envelope by your desk and toss in receipts and warranty cards as you acquire them. Once every two months or so, spend a few minutes adding the information to your inventory database.

Once a year, perhaps at tax time, print out your inventory or re-add the items in your notebook and check to see if the values are still current. If not, go back and put in current figures. You may decide it’s time to increase your insurance coverage.