How to Take an Inventory of Personal Property (and Why You Should Do It Once a Year)

If you own a home, chances are you have homeowners insurance —more than 90% of homeowners have some kind of insurance. Most mortgage lenders require you to have it, but even if you’ve paid off your mortgage, it’s a very good idea to have insurance on your home and your contents (or at least most of it ) so you can be compensated for losses – After all The average loss due to property damage is $15,570 , according to the Insurance Information Institute. And property damage accounts for nearly 98% of all homeowners insurance claims.

So it’s surprising that only 47% of homeowners have prepared a personal property inventory for insurance purposes. This is just a list of your belongings and their approximate value: it’s easy to put together and incredibly helpful in the event of any property damage you may suffer. If you haven’t already taken an inventory, you should do so immediately and update it annually.

What is a personal property inventory?

A personal property inventory is simply a list of your belongings (the home itself plus everything in it) with a documented or estimated value. There are several reasons why you should do this exercise annually:

• Stay organized. After a disaster—a fire, a flood, or any other traumatic event that results in property damage—you won’t be in the best frame of mind. Having a prepared list of your losses will allow you to contact your insurer immediately to file a claim.

• Be prepared . Having documented evidence of not only what you own, but also the condition and value of those items, will help you get the best possible settlement from your insurance company. Annual documentation takes into account improvements such as repairs, equipment upgrades and other changes that can help prevent your insurer from undervaluing you.

• Taxes. You may be able to claim tax losses after a disaster, and having a list of assets with an assessment will make the process much easier.

• Be properly covered. If you took out your homeowners insurance policy several years ago, you may not have adequate coverage—in fact, more than half of all homeowners do not have adequate insurance coverage for their home and contents. Value and replacement costs change over time, so taking an annual inventory of your personal property for insurance can help you stay on top of things.

What to document

So, what should be included in your personal property inventory? Almost anything – it’s better to be overprepared than underprepared, so if you’re not sure whether to include something, include it just in case. State Farm offers several comprehensive inventory tools that will give you an idea of ​​what to think about, but in general you should include the following in your inventory:

• The house itself. Document the condition of your home itself, including any updates or repairs. New roof? Document it. Renovated kitchen? Document it. New boiler? Document it. Even if you didn’t replace anything, document that it is in good condition and properly maintained so that you have no problem getting maximum replacement value.

• Your things. This is a pretty comprehensive list: furniture, clothing, computers and electronics such as gaming systems or televisions, jewelry, books, linens and bedding, collectibles and antiques, firearms, and tools or other equipment (such as lawn mowers or generators ).

• Technique. If you didn’t include them in your renovation update, include all the appliances in the home, including HVAC equipment, washing machines, and anything else you needed to buy and install.

• External spaces . Don’t forget about your outside spaces, including decks, patios, gazebos or any other structures or improvements to the property.

• Property is not stored in the house. Most homeowners insurance policies cover personal property even if it is not stored in the home. This should include anything you store in the trunk of your car, storage unit, or backyard shed.

It’s best to document more, not less. It’s better to document that fancy automatic cat litter box and find out it’s not covered by insurance than to miss it and then find out you could have gotten some cash for it.

How to document

The more information you can provide to your insurer, the better. A few things to include in your personal property inventory:

• Make a list. Start by simply making a list of your belongings using one of the forms above (even if you’re not a State Farm customer), create your own, or use an app like the free Home Inventory app offered by the National Farmers Association. National Insurance Commissioners (NAIC).

• Estimate the cost. For individual properties, include an appraisal. If you have a receipt showing the amount you paid for it, scan it or take a photo of it. If not, you can look up how much it costs online and add a link to the store page, and have valuable items such as jewelry appraised by a professional who can provide you with a written statement of value. You can use a depreciation calculator like this to get an idea of ​​how the value of something like a large electrical appliance has decreased due to age and wear and tear.

• Visual effects. Take photos of your home and your belongings and include them in your inventory; this will show their condition before any disaster or damage occurred. If taking a thousand photos of things seems like a lot of work, you can take a video instead to make it a little easier to capture every room of the house and the things in it.

• Additional materials. You should also include additional documentation, such as maintenance records for major appliances or any after-sales adjustments made that may increase the value of your property.

Once you have completed your inventory, store it in a safe place. If it’s digital, save a backup copy to a flash drive or to the cloud. If the document is on paper, make sure it is stored in a safe, fireproof box, or safe with other important documents. You should consider sending a copy to your insurance agent annually so they can add it to your file and use it as an additional backup.

Having this inventory ready to go means one less thing you’ll have to think about when you’re recovering from a natural disaster or major property loss, and it will make the whole process of getting your settlement check a little faster and easier. If you haven’t taken inventory recently, do it today and make a note to do it again next year.

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