Know Your Stuff: Why You Need a Home Inventory

Is doing a home inventory on your long to-do list? And has it been on there a long time?

We’ll help give you the little push you need by raising your awareness of why you need to do it, as well as easy-to-follow steps on just how to go about it.

Also, we will cover what you’ll be wondering about after you complete your home inventory: Does your existing home insurance cover all that you want, or do you need more? We’ll look at what items should have additional insurance and what policies are available, including a Liberty Mutual Home Protector Plus review.

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Reasons to take a home inventory

Moving into your dream home can be exciting.

But moving is also one of the most stressful events you’ll undertake as an adult — or so say 64 percent of Americans who’ve moved within the last three years, according to an OnePoll survey conducted on behalf of Northern Van Lines. Forty-four percent declared that it’s even more stressful than going through a divorce or having children.

So after the rigors of boxing up your worldly possessions, figuring out how to haul them to your new place, and then unpacking everything, the last thing you want to do is spend more time dealing with all of your stuff. 

But creating a home inventory is the next step you should take after you’re finished unpacking. Here are some reasons why.

You won’t remember everything you own

When do you file a homeowner’s claim? When something bad happens. With all of the stress and hardships, you’ll endure from dealing with the aftermath of an incident in your home, you will not think of every item you need to list on your insurance claim, let alone its cost.

A home inventory is noted as one of the essentials to have when you prepare for hurricane season, but you should have one even if you don’t live in a known hurricane area or a known tornado or fire area, either. With climate change expanding and intensifying adverse weather patterns, a home inventory is essential for everyone.

For example, while northeastern South Carolina through the I-95 corridor in North Carolina is known as “Tornado Alley,” it was a shock when one of the 35 tornadoes that struck the state in mid-April of 2020 included an EF3 that ripped through Seneca, a town in upstate South Carolina. It decimated and battered homes and businesses to the tune of $100 million.

Imagine trying to recall details of all your worldly goods when the roof is ripped off your home, you’re helping neighbors clear fallen trees, and you’re trying to find temporary shelter for your family.

Make filing a claim easy

When an insurance company has details about your belongings, they can better assess the value and determine what can be replaced in the event of a major loss. This will save you time and stress dealing with a claims adjuster, so you can devote more time to taking care of what you need to when you have a home disaster.

You also won’t get frustrated when three months after your claim payment, you remember things like your power tools and ask for a larger check. You won’t be reimbursed for afterthoughts. Once you accept the settlement offer, your claim is closed.

Get your money’s worth and get it faster

The more time you take to provide a home inventory to your insurance company, the longer your insurance claim will take to be paid. 

Plus, why pay the premiums on your home insurance only to not use it properly when you really need it?

Outside of insurance, a well-organized home inventory can also be extremely useful to determine whether you qualify for a tax break or disaster assistance for your loss.

How to take a home inventory

Since item descriptions and proof of ownership are two keys to a good home inventory, here is what information to gather, how to gather it, and how often.

Home inventory basics

An ideal home inventory should include an item description, estimated value, purchase date, serial number and receipts, and photos or a video.

The best way to tackle this task is to inventory room by room. Don’t forget to open your closets, drawers, and storage bins. Also, don’t forget your garage, your shed, and all of the items around the exterior of your home. If you’re making a video, you can narrate it by describing each item.

And do you have so much stuff that you have belongings in a self-storage facility? Don’t forget to include them. They’re covered by your homeowners’ insurance, too.

Home inventory tools

If you need some structure to take on this endeavor, you have lots of choices.

While there are both free and at-cost apps and software to create a home inventory, check out your insurance company first. Since it’s in their best interest to have home inventories and they know how daunting doing one can seem, many of them provide a checklist.

A few of them also have tools to make the job more manageable:

• Allstate offers Digital Locker, which you can access through Allstate’s mobile app. It includes a Quick Inventory, a step-by-step guide to help you create a basic list style inventory, and a Video Walkthrough, which guides you through documenting your items using short video captures.

• Liberty Mutual has Home Gallery, which gives you the ability to inventory up to three properties, add multiple photos per item, scan barcodes, and sync to a secure server. You can also export your inventory as a spreadsheet or PDF for easy sharing or as a backup in case your phone is lost or damaged.

• American Family Insurance has DreamVault, which allows you to download photos and details and sort them by room. You can also generate reports with it.

Home inventory storage

After your home inventory is done, then what? Send a copy to your insurance company. Store your copy in a safe place with other important papers, so it’s handy if you need to grab essentials and evacuate your home.

Also keep a hard copy outside of your home, such as in a safe deposit box or with a family member, and store an electronic copy on a server that’s accessible in an emergency.

Home inventory updates

Since you devoted time and diligence to create a home inventory, don’t stop now.

Update your inventory whenever you make a major purchase. Or, set an annual reminder and, with your list in hand, do an interior walk-through and an exterior walk-around. Make sure you update the list with new purchases or acquisitions, such as picking up an antique chair while visiting relatives out of town and delete items you no longer own.

Check your insurance protection

Is all of your home inventory protected? Don’t wait until you file a claim to find out there are some things your insurance carrier won’t cover fully or won’t cover at all.

By creating a home inventory and sharing it with your insurance company, you can double-check that you have the right amount and type of insurance.

Basic insurance protection for the items in your home

Most home insurance policies cover the contents in the home at generally 50 to 70 percent of the value for which the home is insured.

Check with your insurance company as to whether the contents are insured for actual cash value or replacement cost. With actual cash value, the policy would pay less money for older items than you paid for them new; replacement cost could actually cover replacing the items.

While replacement cost coverage is about 10 percent higher, it’s generally a worthwhile investment in the long run.

Supplemental insurance protection of home items

If you have a lot of worthwhile investments as part of the contents of your home, you may not be satisfied with basic coverage.

With standard coverage, there are limits to what the policy will cover for items such as jewelry, electronics, silverware, and collectibles. For example, jewelry coverage may be limited to under $2,000.

Ask your insurance company what the limits are. Since jewelry and electronics are among the top items stolen during home burglaries, you want to make sure these items are properly covered.  

So for these items, as well as sports equipment, tools, instruments, art, and family heirlooms, you may want to modify your coverage. You could raise the liability limit on your policy. Or you could purchase a special personal property floater or an endorsement. With this, you can insure valuables individually or as a collection, with significantly higher coverage limits.

Liberty Mutual’s Home Protector Plus is an example of this, as it serves as a rider to provide you extra coverage in the event of an accident. It offers replacement cost coverage for your personal possessions.

It also offers Personal Property Replacement Service, in which their agreements with several companies can get your replacement items at a much lower cost than if you were to go out and buy them yourself. And the less that Liberty Mutual pays out in insurance claims, the cheaper its rates will be in the future. Other bonuses: 24-hour emergency repairs and claims assistance.

We hope we’ve convinced you that creating a home inventory is one of those chores in life that’s not nearly as excruciating as you’d expect. Now that you’re more aware of the value of your belongings and you know how to better insure them, it’s a good time to make sure you’re protecting them by doing a home security audit.

Read more: Valet unpacking problems can solve new homeowners

Written by Karen Condor. January 23, 2021

Karen Condor is an insurance and finance editor who writes and researches for the home, life, and car insurance comparison site, TheTruthAboutInsurance.com. She and her husband recently completed a home inventory after switching to a new and more affordable home insurance company.