A Lesson on the Need for a Home Inventory
It was 4 a.m. and wind-whipped flames were licking the trees 100 yards from my back window. A brush fire was threatening my house and everything in it.
I was preparing to evacuate -- some of my neighbors were already gone -- and I realized I had no inventory of the belongings I might have to leave behind. As my kids were throwing photo albums, overnight bags and the dogs into the car, I cursed myself for not following my own good advice.
Consumer reporters are always telling people to keep a household inventory in case of catastrophic losses from a fire or earthquake.
As I can attest, that advice is usually ignored.
“Our adjusters tell us that they might see one or two home inventories in a year,” said Pete Moraga, a spokesman for Allstate Insurance in Los Angeles. “That’s out of hundreds of claims.”
A home inventory is important for several reasons. For one, it helps establish how much insurance you need and whether you need special riders to cover items of great value. And in the event of a loss, it provides proof for your insurer of what needs replacing.
What’s more, if some costs are not insured, it helps establish whether you have a so-called casualty loss that can be deducted on federal income tax returns.
“I can’t emphasize enough how important they are,” Moraga said. “It’s not that big of a deal in a partial loss, because you can still see and piece together what you lost. But, in a total loss like we’ve seen in some of the Southern California fires, it’s incredibly difficult to remember everything you had.”
Big ticket items -- televisions, stereos, furniture and paintings -- aren’t the problem, experts add. It’s the little things.
Consider: How many compact discs do you own? Videotapes and DVDs? Computer programs? Shirts, skirts, coats, socks? How about kitchen utensils, pots, pans, bowls, china and crystal?
“Most people can’t remember what they had for lunch, much less what’s stored in the attic,” said Jean Salvatore, spokeswoman for the Insurance Information Institute in New York.
Indeed, many fire victims say that even when they think they’ve done a great job of reconstructing what they’ve lost, they’ll find themselves years later searching for some small item and realizing that it was lost in the rubble and remembered too late to recover the cost.
Nevertheless, home inventories are rarely done because they’re so time consuming. They require recording each and every item of furniture, stick of clothing and family game owned, whether it’s in the living room or the basement. Ideally, an inventory should also note the type of construction of the home and any features -- like built-in cabinets or granite countertops -- that would affect the cost of replacement.
Written inventories also need to be stored in a safe place so they don’t get destroyed along with the house.
In the last few years, technology has made the job somewhat easier. The simplest way to record and file a home inventory is with a video camera. You simply pan the camera around the outside of the home, and then through each room inside, recording everything from the furniture to the bric-a-brac. All the drawers and cupboards should be opened and all their contents carefully recorded.
Be sure to store a copy of your video recording in a safe place -- somewhere other than in your house. Don’t have a video camera? The Insurance Information Institute has a free online form that can be accessed either through the organization’s website at www.iii.org or directly at www.knowyourstuff.org.
Filling out the form is likely to take longer than photographing your inventory, but it prompts people to do smart things, like record the home insurer, policy number and contact information -- all details you’d be searching for in the event of a disaster. It also allows users to scan and attach photographs and receipts.
This written record can also be used as a shopping list if you are unfortunate enough to lose everything. You can e-mail the form to yourself to make a backup copy.
I was fortunate. As I walked out to the car, firefighters came up my driveway and said the blaze was under control and we didn’t need to evacuate after all.
But as you’re reading this column, my kids and I are working on that home inventory.
Kathy M. Kristof, author of “Investing 101" and “Taming the Tuition Tiger,” welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail firstname.lastname@example.org.