The Why and How of a Household Inventory

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One personal finance project that a lot of people overlook is the household inventory. It’s one of those “once in a great while” tasks that’s easy to overlook and forget about, but it’s not very hard and it can pay huge dividends if you’re carrying homeowners’ or renters’ insurance and something goes wrong with your living quarters.

A household inventory is a documentation of every item in your home so that you have this in the event of a disaster, such as a burglary or a house fire. It usually consists of a list of the items and/or a videotaped walkthrough of your home which captures images of the items.

Such an inventory can be very useful when dealing with insurance companies, as it provides documentation of the items that you own, thus helping your case for an insurance settlement.

Eight steps for making your own household inventory
One can make an excellent household inventory in just a few hours on a weekend. I was able to do my own home in about two hours of steady effort. It’s not too hard at all – it just takes time. Here’s the game plan.

1. Get a video recorder. If you don’t own one already, borrow one from someone. A video recording is a great way to document all of the items in your home, even the ones you forget to list.

2. Get a laptop – or a very good note taker. When we documented our home, we found it easiest to take a laptop from room to room in our home to jot down all of the information. If you don’t have a laptop, designate someone to be a note taker (maybe yourself, if you’re doing it alone).

3. Do one room at a time. Go to each room in your home and document all of the significant items in it. It’s not necessary to document individual foodstuffs and individual toiletries, for example, but I’d document things down to silverware and plates – my rule of thumb is that if it’s worth more than $10 and easily replaceable, or if it’s not easily replaceable no matter what, it gets documented.

4. Record as much information as you can about each item. Make, model, serial number, purchase date, and so on are all good pieces of information to have, especially for larger items. For smaller items, just list what they are and make sure that some video is taken.

5. Be sure to videotape or photograph any personal valuables. Jewelry and family heirlooms fall into this area. These are items that are not easily described and are best noted with visual proof of their existence.

6. Store the list/video in a secure place not in your home. This is a perfect item for a safe deposit box at your bank, for example. Just make sure it’s not in your home, as this is an item you’ll only need if there’s significant damage to your home or to the property in it.

7. Update the list semi-regularly. There’s no need to do this monthly, but like keeping up with your home insurance policy, an annual updating of the list can be useful. You can tack addendums on the end of your earlier lists or videos if you wish, covering any new purchases you’ve made.

8. Make sure that everyone knows where the list is, including a person or two who doesn’t live in your home. That way, if a real disaster strikes and you’re incapacitated, others can retrieve the list and help with insurance issues while you’re recovering – or can help your survivors get the insurance settlement that they’re due.

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39 thoughts on “The Why and How of a Household Inventory

  1. This is an excellent recommendation. An added benefit is that it will give you a real idea of your belongings, which you can then use to pare down your possessions (if you haven’t done so already).

    People are inclined to believe that they won’t be robbed, that their house won’t burn, or be hit by a tornado. These things do happen, and the victim never sees it coming.

    Remember to document things you might tend to see as part of something else – expensive bedding, clothes, and any collections you might still have around the house.

  2. I haven’t done a video, but I did take pictures in each room and of the contents of closets.

    I uploaded the photos to Flickr so that there’s no need to keep a safe deposit box. It’s free for a basic account and the photos are accessible anywhere!

  3. Taking an inventory of your household periodically is a great idea. It’s one of those things you will need in the unfortunate event of natural disaster or burglary/vandalism. My mother-in-law lost her home to fire a couple years ago and did not have such an inventory. It made the insurance claim much more difficult, and in the end the amount she received was probably well under the valuables actually lost.

  4. I need to do this myself. If you can’t borrow a video camera, you may be able to use a one-time use video-camera from CVS – it can be bought for under $30 on Ebay (and cheaper at the store, I’m sure).

  5. This is good advice. I had some movies stolen from a house I lived in and it was hard to remember everything I owned. It’s worth a few hours to make sure you are compensated for everything you lose if something goes wrong.

  6. I would like to hear from someone who works in a claims department. How much of a difference does documentation make, and how much does detail matter? Do insurers question the truthfulness or age of documentation?

  7. Just out of curiousty, I wonder what the default is for insurance if you didn’t document your belongings. I’m sure if varies based on the insurance company.

  8. Ryan reminded me of other questions I have. Many of this site’s readers live with fewer possessions than average. If there is a default payment based on, e.g., the demographic of the insured, might those who live simply receive less because they demonstrated fewer possessions than a normal person owns? If that is the case, what is the best way for those who own little to lower their homeowner’s or renter’s insurance premiums?

  9. I use Quicken and it comes with a home inventory feature. Whenever I purchase something I want to track, I also enter a record for it in Home Inventory; so I have a running record. I can attach a copy of the receipt to the record too.

  10. Another note; I checked out the StuffSafe site and it doesn’t appear to be maintained; bugs haven’t been fixed nor has the blog been updated.

    I’d be careful about loading a list of my belongings to an unknown website.

  11. I’ve been keeping a home inventory for several years now. This sounds kinda funny, but the thought of having to photograph stuff for my home inventory really keeps me from buying stuff. I keep mine stored on CD-ROM in a safety deposit box at the bank.

  12. That’s it – this is just the blog post I needed to get started on my inventory. I’ve been meaning to for months, and every time I think about the possibility of an apartment fire or zombies taking over the earth, I cringe. I have Quicken: maybe I’ll try that route. Anyone have any experience making a good Excel chart for something like this?

  13. The home inventory is essential for everyone who has any type of insurance policy for their property.

    Free Home Inventory Tool

    knowyourstuff.org

    Another inmportant issue to review is that of replacement cost coverage vs. actual cash value coverage. Make sure you review your policy and/or speak with your agent regarding which coverage your policy provides. Claim time is the worst time for surprises.

  14. I do not recommend this to any of my clients. It is a bad idea. Home inventories are a great way for an insurance company to prove what you don’t have, just something to think about. Also they are only accurate the day you do the inventory – therefore it is just a waste of time.

    My advice would be to have a good insurance agent that helps you find a company that won’t try to fight you at every turn if you have a claim.

    If anyone needs a further explaination of why this is a bad idea – i may have more time later to expound on my comment.

  15. AND – make sure you get REPLACEMENT cost insurance! Regular insurance will just give you the ‘used’ worth of an item, so you can lose a lot of cash. It costs a bit more, but if you have a large home with good quality electronics and furnishings, you’ll want to be able to replace everything.

    video is great, but photos are good too. Thanks Trent, this is a great reminder for me to update my list of ‘stuff’.

  16. The point about replacement cost insurance is a great one. We have had people in our financial counseling that have lost their home due to fire and since they had replacement cost everything was taken care of. If they had not used would have been the best they could do.

  17. I would second Michael’s question. I already have a list and photos/video, which we did when we bought our current house (the easiest time to do it, by the way!) but have read a few articles online that speak to it being ESSENTIAL to have receipts etc.

  18. After doing our inventory, we talked to our insurance agent. I would totally recommend taking time to do this.
    We lowered our Renter’s policy by $10,000 and then put two pieces of family jewelry on a rider policy. We don’t have much stuff and what we do have isn’t that expensive (or are family hand-me-downs), but the jewelry is virtually irreplacable. It would have to be custom done to be replaced so we insured that at a high level. It might be cheaper to get a rider for a category than to make your whole policy replacement value.
    I know if our apartment burns that I would get enough back to start over.

  19. Elizabeth’s post reminded me… What about jewelry? In my culture, parents give jewelry at graduations, weddings, birthdays, etc. My mom bought me some from back home as well. Back home, jewelry does not come with certificate.

    How do you document those? Will picture/video be enough? Will the insurance company acknowledge that you have diamond necklace and not glass necklace?

  20. Speaking as an insurance agent – it is well worth the hour or two to do this! A couple tips I would add: Do not to forget the garage, talk to insurance agent about storing a copy of the list. While I can only speak for my office, we are more than happy to store a copy of our client’s lists. It also provides a good opportunity for your agent to suggest coverage that may benefit your situation.

    Also, someone above asked what the base amount is for personal property. With most companies in Michigan it is a percentage of your dwelling coverage (50% to 80%, depending on the policy).

    I have heard of claims adjusters bringing a Sears catalog with them to meet with homeowners who had lost everything. It helps them recall the everyday things like how many sets of sheets were in the back of the linen closet or that ugly serving platter that hasn’t been touched since opening the wedding gifts.

  21. @snow_drops
    Get your jewelry appriased NOW!!! That is the only way to ensure that you have it covered properly. Find a good and well respected jewelry store and the cost is about $40 per item. There is usually a cap ($200) too so if you have a lot do it all at one time. Then take the actual items and the aprasials to the insurance agent. Then they will keep a copy of the apprasial and adjust your policy accordingly. Our actual renter’s policy limits jewels to $1500 total and no more than $500 an item. My ring and my husbands watch are over that so they needed a seperate policy. Most anything with a diamond in it needs a seperate policy…notice to all married guys (Your wife’s ring is important to her; make sure you can replace it if you have to.)
    :)

  22. Another way to keep a home inventory is to simply keep an in/out list. Everytime you make a purchase, keep the reciept and at the end of the month, put all these items on your in/out list. Additionally, take a note when you throw something out or give something away. Of course, you’d want to be reasonable and only include items over a certain dollar value (for example $20).

  23. John, I would please like a further explanation of why it is a bad idea. I’d like to know how agents know which companies won’t fight and which will, especially if a client owns or doesn’t own something unusual.

  24. @elizabeth
    Thanks for the tips. I will definitely get them appraised then. I didn’t know you can do that here..

  25. I’d second the idea of appraising jewelry (1) of known but unconfirmed value and (2) of suspected value.

    Some jewelers will appraise based on a standard hourly fee – and, of course, you can always ask how they do the appraisals. You might want to let the know you’re doing this for insurance purposes. The jeweler and I sat down and he even pointed out some things I had brought which he thought did not merit appraising (although I did want one of them appraised anyway because it was unique).

  26. I haven’t updated my home inventory in ages. Thanks for the reminder to get back to it!

    The tool I’ve used to track my inventory is a free Microsoft Access 2000 template from the MS Office site: http://tinyurl.com/2g7m7y. (Note: the crazy-long Microsoft web address was shortened with an online service called TinyURL.)

    This Access file will produce scary error messages about “unsafe expressions” when opened in newer versions of Access, but that’s only because it interacts with the computer’s file system to store photos. Tell Access *not* to block these expressions, or the database won’t work properly. There’s also a version for Access 2007, which I assume solves this problem: http://tinyurl.com/2hpo8b.

    If you don’t have Access, this Excel spreadsheet might do for a minimal list: http://tinyurl.com/29llq8. It should also work in other software like OpenOffice.org.

    I’ll have to look into the program provided by knowyourstuff.org. I’d recommend that anyone thoroughly investigate such a program before feeding it a list of their valuables; these days, the web is full of malware. I could imagine such a program being very useful to unscrupulous ad companies (for targeted spamming) or organized crime. I find it troubling, for example, that there’s no privacy policy on that program’s website.

  27. Whoops. Looks like WordPess includes the trailing period as part of those links I posted, which keeps them from working. If you want to download the templates I mentioned, you’ll need to remove the period.

  28. I can’t afford a video camera but I do have a regular digital camera. To keep the inventory up to date — and to preclude the possibility of having some insurance company claim that something not on an out-of-date inventory didn’t exist — snap a photo any time you bring home any purchase of any value.

    With Mac’s iPhoto you can congregate all the inventory pix in one folder, which can be burned to a CD along with an Excel or Quicken file listing your loot’s value. Otherwise, manually move all your inventory JPEGs to a single subdirectory, for the same purpose. Keep a copy of the CD at your office or at a friend’s house, so that it will not be lost in a fire.

  29. As a former insurance claims representative (yep, I was the one that would pay your claim!) this is the BEST thing that you can do to protect yourself.
    As a claim rep, it is actually our job to ensure that you are getting paid for what you had. Contrary to popular belief, the insurance company wants to pay your claim fairly, however you would be amazed at the stuff that people claim they have (and there is no way that they do)!!
    The best thing to do is take a video or picture of each room in the house and for electronics, make sure that you have documentation of the model # etc.

  30. Getting replacement value insurance is the ONLY sane way to go. When we were first married, almost all of our furniture and virtually all of our “stuff” was either off the trash piles in the City (NYC was great for wonderful cast-offs!) or things we brought from home. I figured if we had a claim we would be paying the insurance company if we got depreciated value. Having the insurance company depreciate everything will really cost you, and if you get hit with a hailstorm or something and have to pay for the depreciated 12-year-old roof will cost you far more than the small difference in premium. Sharon

  31. We did this as we unpacked all the boxes, it took 3 times as long but we now have pictures and written documentation of our stuff, even stuff we forgot we had.

  32. Try doing it the online way. RedLightDepositBox.Com has many tools to help with your inventory. Also has a way to help in crime prevention that lets police and specialty stores search items as they come in to see who the rightful owner is and if stolen then instantly call the police and return your items back to you.

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