In the event that your personal property is damaged or stolen, you could receive full or partial coverage for your belongings. Depending on your homeowner's insurance policy
, you would be required to submit a list of your damaged or stolen goods to claim a total loss
of your possessions. Additionally, you would need to include the estimated value of your goods along with a household inventory.
How to create an inventory
To create your household inventory, you can write down the items in each room of your home. You should be very detailed in your description, steering clear of any generalities. For example, if you have two different lamps in one room, be sure to include a description of each lamp in your inventory. If you have two lamps that are the same, then quantify each lamp with a number. Your inventory should clearly state the type and number of individual items within a room.
Once you've itemized your belongings, create a separate "value column" on your inventory. The value column is essential, since it will greatly determine the amount of money you receive from your insurance company for the lost property.
Many homeowners' insurance policies will calculate the amount of money it will pay you based on the following insurance terms:
- Actual cash value - The actual cash value (ACV) or market value, is the cost of your possessions if you sold them in the marketplace. Meaning, the actual cash value is equal to the replacement cost, minus any depreciation. Insurance companies prefer this method of payment because they don't have to cover the original costs of items.
- Replacement cost – Your insurance plan may cover the cost to replace your lost property. This is the better option for you, because you receive cash based on the current value of your lost items. You don't have to consider the original item's initial cost.
Homeowner's insurance policies vary by company, so make sure to investigate what your policy will cover and how they define their coverage terms.
TIP: Include any item's serial number or receipt in the inventory you submit to your insurance company.
Using a camera or camcorder can help you create a digital inventory. Pictures and recorded videos provide further support of your written inventory. The insurance company will have visual evidence of what items were contained in each room before they were lost.
When you've finished your inventory, you may want to consider the following suggestions:
- Keep a couple of copies of your inventory around the house.
- File a copy of the inventory with your insurance company.
- Place a copy in a secure location, like a locked drawer or safe.
Before you move, you should still check and update your inventory. You might have bought furniture and appliances to use in your new home that you may not have included in your itemized list. Also, have someone else read and check your household inventory. It won't hurt to have another pair of eyes to make sure that your inventory is clearly understood and that all of your belongings have been included.