Out of all the tedious things people dread about insurance, I would wager the one that ranks highest is creating a household inventory. Who wants to do that? I’m sure a few hands went up but not too many.

Save Me Time!

  1. Nobody wants to make an inventory of what they own. It’s tedious and time consuming.
  2. However, it is easier than it used to be and can be very beneficial if you have a loss.
  3. If you bought cheaper coverage or don’t want to risk an argument with the insurance company if you have a loss, an up to date inventory can be very valuable.

The Rest of the Story

Human beings aren’t wired to do boring things without a really good reason. Kids don’t clean their room until someone is coming over and they have to. Otherwise, yeah, I’ll get to it…eventually.

We tend to procrastinate unless there is some kind of consequence like a deadline. Having a thorough list of all your possessions in case the house burns down somewhere far out in the future? Yeah, that’s too theoretical to create urgency.

So most people don’t do inventories. And it’s understandable. I’m not going to scold you. However, that doesn’t mean you shouldn’t.

So we’re going to cover two things here: why you need an inventory and how to make it easy to prepare one.

Why You Need An Inventory

Because I said so! Sorry, had to get that out of the system. Let’s address this by discussing what goes wrong if you don’t have an inventory and you have a loss.

Let’s say you go on vacation and, when you return, you realize someone had broken into the house while you were gone. You see the TV is gone and the laptop. Some of the furniture too. You wonder what else is missing.

You know who else will wonder? The insurance adjuster when you call to report the claim. They will ask if you can document what’s missing and, like most people, you will say, “well, uhh, I think I sorta know”.

And that’s when you’ll wish you had made an inventory.

The Cost of Not Having One

So your adjuster will help you try to reconstruct what’s missing, but it’s not going to be perfect. You’re going to forget about certain things. Even for those you remember, what did you pay for it? What model of TV was that again? What was the style of those chairs?

If you don’t know these things, it’s awfully hard to get a fair reimbursement from your insurance.

And now we get to the part where we need to remind you again about those three dreaded letters, ACV…Actual Cash Value. If your policy only had ACV coverage for your possessions, then you are going to get reimbursed less than you think.

That TV you paid $700 for? ACV says it’s only worth $250 now because it’s an older model, so that’s all they’ll pay.

Those chairs they took, nobody sells them anymore, you don’t have any pictures, and we don’t know what you paid, so we’ll just have to take our best guess at what the current value is.

The robbers took four chairs, but you might only get enough from the insurance company to buy one new one. If you had replacement value, you’d at least get back four chairs.

You’ll still have issues if you have replacement value (if you can’t document the model of the TV or the style of the furniture you might get shortchanged on the replacement value), but you’re a lot worse off with ACV on top of that, especially if your possessions were older.

How To Make An Inventory

So now that hopefully you have a little urgency to create an inventory, what do you need to do? We’re going to remain practical and give you the ideal way and the sort of good enough way.

The Perfectionist

If you really want to do it right, you need to go through every room of your home and take pictures or video of everything in each room. But that’s just the beginning.

Next, you need to identify every significant purchase and document as many details as you can about them. Who’s the manufacturer? What’s the model? When did you buy it? What did you pay for it? Ideally, you’d have receipts available for all these purchases too!

For smaller items, pictures will largely suffice. It tends to be difficult to remember quantity, so if your pictures let you identify how many dishes you had or how many old coats, you’ll be in good shape.

Then, compile everything in a file and put it in a safe place (more on that below). 

The Realist

So you’re not the type to save receipts? You’re not even going to create a list of makes and models of your electronics or your coach? OK, what will you do?

Can we get really accurate pictures? Like don’t just take a picture of the room. Take separate pictures of the more valuable items and zoom in on information about models.

There are also apps out there that will help you through this process to help you organize and document. We will eventually do reviews of these apps, but until then, I’d rather not recommend any without doing more thorough research.

One more important thing. Don’t just leave the photos on your phone. Make sure they’re uploaded someplace where they can be accessed if your phone is lost or damaged.

Make A Backup

Whether you make a master excel sheet with every item or just take photos, you need to store it someplace that makes sense. Having a giant spreadsheet on your home computer that could get lost in a fire or flood isn’t a great idea. Putting a paper file in a drawer has the same risk. As mentioned, leaving it on your phone isn’t that helpful either.

The obvious solution is to upload it to the cloud. If you have privacy concerns about that, there are apps where you can store things with encryption.

Also, most insurance companies have tools where you can store an inventory with them digitally. The nice thing about this is it’s very convenient if you have a claim, but these tools may be more difficult to use and may not be portable if you change insurers.

Final Thoughts

Doing something is better than doing nothing. Doing more is also better than doing a little, so the first step is to get started and do something!!! If it’s too much to do it all at once, do your photos to start. That’s the easiest place to begin.

Maybe you take your victory lap for that, but then next time you see an insurance commercial that annoys you, remind yourself to make some time to do one room in detail. Then, you can keep adding more rooms in time and before you know it you’ll be done. Rome wasn’t built in a day. Your insurance inventory doesn’t need to be done in one, either.