A home inventory is a comprehensive report that includes detailed descriptions and photos of the personal property in and around your home.
While considered a key component in documenting insurance claims, a home inventory is also valuable for estate and financial planning.
Importance of a Home Inventory
If you were to step outside your home, could you list all the items you own?
Even if you could list everything, would you be able to provide detailed information — including the purchase date, cost, model, and serial number — on the contents of your home?
In terms of insurance coverage, a home inventory sufficiently prepares homeowners to deal with potential losses. An insurance claim requires a detailed list of all the items destroyed, damaged, or stolen. Proper documentation ensures a faster and smoother claims process, as well as maximizing your insurance reimbursement.
In fact, you must provide documented proof of ownership to receive a settlement covering the full extent of the loss. According to the National Association of Public Insurance Adjusters, most policyholders do not realize that the burden of proof rests with them.
Benefits of a Home Inventory
Obtaining a comprehensive home inventory:
- Ensures you have the necessary amount of insurance coverage.
- Identifies items — such as jewelry, coins, antiques, artwork, and silverware — that have limited coverage. You can then decide to purchase additional coverage (known as a “rider”) to insure items for their full value.
- Allows an evaluation on whether to insure your property and contents at “replacement cost” or “actual cash value.” Replacement cost is the amount it takes to replace or repair your home and possessions with materials of similar quality. Actual cash value is a lower amount that consists of replacement cost less depreciation.
- Results in a higher appraisal for your home, since it documents and provides proof of home improvement projects which add value to your home.
- Verifies the condition of your assets before moving or placing them in storage in case of loss or damage.
Home Inventory in Estate and Financial Planning
A home inventory also acts as a valuable resource and supplement for wills, trusts, or other legal documents:
- The home improvement report provides a detailed breakdown of personal property, including beneficiary designation and contact information for each item. It ensures your assets are distributed according to your wishes.
- Important documents such as wills, life insurance policies, deeds, and stock certificates can be scanned into the inventory report, along with the location of the documents.
- A home inventory report clearly defines all needed information, so the probate process is simplified, faster and less stressful.
- Because the home inventory is a complete list of your personal assets, it can be used for loan applications or determining your net worth.
- A home inventory provides a valuable resource for estate sales and auctions.
Information You Need
When conducting a home inventory, include the following information about each item:
- Model Number
- Serial number
- Initial Cost
- Estimated or appraised replacement value
- Purchase date
- Scans of receipts and important documents
- Copy of receipt if available.
- Photos and video footage
- For estate planning, heir designation
Compiling Your Home Inventory
Though easy to compile, you’ll need time and patience to gather the information needed for a home inventory report. For your insurance company to accept your home inventory, it needs to be detailed and comprehensive.
Here’s how to go about it.
To conduct a home inventory you’ll need:
- A spreadsheet or word processing program. Use one of these programs on your computer or download an app on your smartphone. Or, you can print out a home inventory spreadsheet and fill it out by hand.
- Digital camera or smartphone to photograph your possessions.
- Smartphone or video camera to provide additional documentation of your possessions as they appear in your home.
- Scanner (optional) to provide digital images of receipts and other important papers. You can also use your smartphone to take photos.
- Flashlight for finding model numbers on the back of appliances and electronics.
- Tape measure to record the size of items.
How to Conduct a Home Inventory
When conducting a home inventory, be as thorough as possible in your documentation. Include both video and still images.
Video footage enhances your claim by showing the items as they appear in your home whereas photos provide detailed information.
The steps include:
- Outside Video: Include a view of the front and back of your home, along with patios, landscaping, fencing, and any additional buildings or structures on the property.
- Outside Photos: Take pictures of each outside area along with any structures and other items in detail from several angles.
- Interior Video: Record each room in your home. Mount your video recorder to a tripod so you’ll have a smooth pan of each room. Start by focusing on the upper half of the wall toward the ceiling and pan slowly around as far as you can without moving from where you are standing. Then, move down to the lower half of the room towards the floor. Lastly, pan back to your original starting point.
- Interior Photos: Take a photo of each room in your home. Position the camera in each corner of the room, or where you can achieve the best wide-angle shot of the entire room.
- Detail Photos: Take photos of each item and include the frame number of each photo next to the corresponding item on your spreadsheet. Group similar items together in one shot, but specify what’s in each photo on the spreadsheet.
- Spreadsheet: Organize your spreadsheet by rooms, and record as much information about each item as possible.
- Receipts: Proving ownership and value of your items is crucial, so find all receipts, including appraisal certificates, and attach them to the corresponding page of your report. Use a scanner to store copies of your receipts digitally, eliminating the need to attach the receipt to the report.
Hiring an Inventory Specialist
An alternative to conducting your own home inventory is to hire a reputable company to compile it for you. Advantages include:
- Credibility: Using an inventory specialist lends credibility to your inventory for insurance companies, financial planners, and law enforcement.
- Time: An inventory specialist can compile a home inventory report within one week.
- Expense: Hiring an inventory service is affordable and is money well spent when damage, theft or death occurs.
- Information: Complete and detailed information for each item — including photos and scans of receipts — to assist in claims or probate. Video footage is also taken to support ownership of property.
- Security: Data from your inventory is encrypted and stored at a back-up facility, so your copies are secure if they’re lost or destroyed.
How to Choose an Inventory Specialist
When hiring an inventory specialist, be sure they have and provide the following:
- Performance bond.
- Insurance coverage against accidental damage to personal property.
- Signed guarantee certificate that the client’s information will be kept strictly confidential, and the steps that will be taken to ensure this occurs.
- Statement of work defining what is to be inventoried and how the information will be delivered.
- The means used to secure the data is clearly defined.
- Renewal policy that details the cost of updating your inventory.
- Review a sample inventory portfolio so you can see what you will be receiving.
- Ask any questions that you may have concerning what will be provided.
Keeping a Home Inventory Secure
Make two copies of your home inventory report.
Store the information in a safe location away from your house such as a safe deposit box, at your insurance agent or lawyer, or by uploading it to a secure data backup provider.
At least twice a year, review your home inventory. Record any new items or delete items that you no longer own.
- Insurance Policy Limits (video)