Real Estate Buyer’s Agent Council of the National Association of REALTORS®
Look around your home, close your eyes, and make a mental list of everything you own. Few people can recall more than a small fraction of their home’s contents. But suppose you are the unfortunate victim of a major disaster like a fire, a tornado, or a hurricane. In that case, a home inventory can be an essential resource for quickly settling a homeowners insurance claim and returning to everyday home life.
The cost of replacing the contents in your home adds up quickly. Are you not convinced? For starters, how many pairs of jeans do you have and how much would it cost to replace them? Add to that figure the cost of replacing the rest of your clothes, shoes, boots, jackets, etc.
You’re now probably well into four figures before you’ve considered big-ticket items like your furniture and appliances, electronic devices, jewelry, or car.
Many homeowners insurance policies cover the contents of your home at a fixed percentage of the total replacement cost, typically ranging from 70-75%. For example, if your policy includes $300,000 to rebuild the dwelling and 75% coverage for your personal property, you can claim up to $225,000 in personal property losses.
But is that figure high enough to cover your losses? Will you be able to give your insurance company adequate details to settle your claim? The only way to answer these questions is with a detailed home inventory.
WHAT is Included in a Home Inventory List?
A simple list is better than nothing, but it’s best to include as much information as possible:
- Item description
- Make, model, or serial number (if applicable)
- Purchase price and date
- Estimated replacement cost
If you don’t have receipts, past credit card statements can help identify purchase prices and dates.
It’s also good to have a visual record of your possessions as further proof of ownership, whether it’s a series of photographs or a video walk-through of your home.
HOW to Create a Home Inventory?
Pick whatever organizational approach works best for you. Some homeowners like lists, while others prefer spreadsheets. Another option is to create folders for each room and sub-folders for categories of items within each room.
For example, you might want to split your Home Office inventory into categories for Furniture, Equipment, and Supplies.
There are also dozens of apps that can simplify the process of keeping track of inventories, including features like barcode scanning to retrieve product information automatically. Many of these apps are designed for business inventory management but offer features for homeowners.
For starters, check out Sortly (free and paid versions) and Memento Database (extremely versatile). There are many other apps designed exclusively for iOS or Android users, so be sure to compare features and costs before investing your time building a home inventory.
Also, see if you can get more mileage from an inventory app by using it to manage other home organization aspects, like your pantry contents.
WHEN to Create a Home Inventory?
The best time to create an inventory is NOW. It can feel like a daunting task, but it will be easier if you break it down into manageable pieces, one room at a time.
If you’re moving into a new home, things might feel hectic, but it’s also an excellent opportunity to create your home inventory. As you unpack your boxes, take photos and compile lists. And if you hired a mover, you might be able to rely on their inventory records to jumpstart your efforts.
Once you’ve completed your inventory, develop a habit of keeping it up-to-date. As you purchase new items, add them to your records and delete things you’ve discarded.
WHERE to Store Your Home Inventory?
It’s essential to have a home inventory, but it’s also crucial to keep it safe. Paper documents should be kept in a fireproof safe or stored in a safe deposit box. Better yet, make digital copies and securely store them in the cloud.
Ensure you understand the privacy settings for any digital services you’re using to compile and store your home inventory. In the wrong hands, the contents of your home can be valuable information. It’s also a good idea to keep your home address off your inventory records.