Protect Yourself: 5 Easy Steps to a Complete Home Inventory

by Kevin on July 23, 2008

firetruck

Last year my wife and I were sitting in our apartment cooking dinner and waiting on a friend to come over and join us. We were making some awesome lasagna and just enjoying being newlyweds. We kept hearing some loud noises outside and for those of us that have lived in apartment complexes that was nothing new. These noises were persistent, so we finally went out on the patio to see what was going on. Much to our surprise, our entire complex entrance had been blocked off by firetrucks and police cars.

Let me tell you, that gets your heart rate going for a minute or two.

It turns out two apartment buildings down from us was smoking from the top of a chimney and no one had a fire in their fireplace. The complex had neglected to get the chimneys cleaned annually and leftover stuff somewhere in the chimney was now on fire.

We went outside and got to see the entire action. Firefighters on the roof chainsawed off the top of the chimney and then sprayed water down through the hole. They had cleared the building (and scared some of the unknowing inhabitants) before doing this. Imagine you live in the bottom apartment, you have to evacuate your apartment because their might be a fire in your building. Now imagine they dumb gallons and gallons of water down the chimney and it runs down to your place. I’m guessing every apartment got some water damage, but you would think the people at the bottom would get the worst of it.

Thankfully, no one was injured and no serious damage occurred to the apartments. But it could have been different. The entire building could have been gutted by smoke and fire damage — those folks could have lost everything.

What would you do?

If you came home one night and your house was just… gone, nothing but ashes, what would you do? Hopefully you would have insurance, but there are some extra steps you can take to truly protect yourself. This post is going to show you how to do a complete home inventory for insurance documentation purposes.

Why do I need a home inventory?

When your house is destroyed and all of the contents within it are unrecognizable, the insurance company may not give you full value for your belongings. You say you just bought a 46″ plasma TV. You lost the receipt, the TV, and the box in the fire. Hmmm… could be kind of hard to prove. The insurance company may think you’re trying to scam them (and I’m sure people have in the past). Having proper documentation can help you prove you owned what you really say you owned, and get that insurance check faster.

Five Easy Steps to a Complete Home Inventory

1. Have insurance

It almost goes without saying, but you would be surprised how many people live in apartments without renter’s insurance. As a home owner, you can’t get a mortgage without insurance. The banks simply won’t do it. But there is no stipulation for renters. If your downstairs neighbor leaves the space heater on and burns down all of the apartments in your area and you don’t have renter’s insurance, you’re pretty much up a creek without a paddle.

The beautiful thing about renter’s insurance is how ridiculously cheap it is. When I was in college and living in a duplex with two other guys I got renter’s insurance through the same company that held my automobile policy. The absolute cheapest insurance I could buy was $12/month for almost $24,000 in coverage. I could not only have replaced everything I owned with that money, but probably everything my roommates owned as well.

If you don’t have insurance, call your agent today and get it setup.

2. Know what is important to document

You don’t need to document the notes you took in science class in the 10th grade. You don’t need to document the peanut butter in your pantry. You do need to document your couch, tv, and furniture.

Don’t waste time documenting things that are worthless in the eyes of an insurance company.

3. Grab a camera/video camera and go

The easiest way to document your belongings is to grab a camera and start taking photos or video. Digital cameras are so inexpensive these days that even if you don’t have one, you probably know 20 people who do have one.

You’ll want to take pictures of all the major items in your house. Here’s a short list: furniture, electronics (iPod, computer, laptop, TV, DVD player, stereo), clothing (especially high quality, expensive suits and the like), and even your appliances. For electronics it would be wise to document the serial and model numbers off of the back to prove that you did have this brand DVD player and that brand expensive gizmo.

4. Create extra documentation

The pictures are a great start and you’re already ahead by doing that. But you’ll also want to convert those photographed items into some sort of easy to digest list. I would put the items into an Excel worksheet and document room by room. Something like this: In the living room, we had the TV, the couch, the DVD player, and the stereo system. Those items are worth $X each. Now in the office we had…

Having a list that you can hand over to your insurance company (along with photos) can go a long way in helping you out.

5. Store your documentation in a safe place

All of this work is essentially worthless if you don’t store your documentation in a safe place. What’s a safe place? Somewhere outside of your current home (and not with your neighbor). Try a safe deposit box, or a box at your parents’ house.

Imagine you do all of the above steps, but leave the Excel worksheet and photos on your computer. Your house burns down or is destroyed by a tornado. The computer is gone, and along with it your documentation.

I also recommend storing it at least a state away. Look at Katrina. If you have your documentation in a safe deposit box at the bank down the street and the bank is also wiped out by the natural disaster, you’re still up a creek without a paddle. We store ours with our parents who live 6 hours from here and are unlikely to be affected by any natural disaster that affects us.

What about you? Do you have your belongings documented? Where do you store them? How did you go about it? Leave a comment so others can learn from you.

{ 7 comments }

PT July 23, 2008 at 9:07 am

Glad you guys are ok. Scary.

Great advice. Stumbled.

I havn’t done an inventory in a while. Thanks for the motivation.

Kym July 23, 2008 at 11:46 pm

Wow. This really hit home for me. The story you told at the start of this post – that person with the apartment on fire, that was me last May. Only it was not put out with minor damage. It took 30 mins for fire fighters to arrive and another hour to put it out, and very little remained that wasn’t damaged by fire, water, flame retardant, or soot. I did not have renter’s insurance, so you can imagine how well that worked out. I had an estimated $12k in items lost, as did my 1 roommate. I successfully sued my neighbor, whose neglect had started the fire in the garage below the townhouse we rented, last December for $4.5k. It didn’t cover everything by a long shot, but it was better than nothing.

I learned a lot from that experience. I was moving the following month anyway (I was in my last year in college and moving to a new city for work), so I looked into getting renter’s insurance on my new place. They wanted every little thing documented, though, and I didn’t have the patience to do all of that, so I still don’t have renter’s insurance (bad, I know, and I really need to get on this). When I was suing, the photos I had to prove that I owned items didn’t count as proving my ownership, nor did having people come to court to testify that I did have these items. The only thing that mattered was receipts, which naturally did not make it! Even credit card statements did not count, as you can’t identify the item purchased from them. Since then, I have saved every receipt for every non-consumable good I have bought. In court, scans of receipts weren’t acceptable either as they could have been doctored, so here I am with my big stack of real receipts. I can’t picture myself hanging onto the physical receipt of everything I ever buy ever, but apparently that’s what you have to do, and I hope insurance doesn’t work the same way. I have also photographed my major purchases as they came in as a bonus.

Last year I bought Quicken Home Inventory so that I could document every single thing I own, just like you suggest doing in an Excel sheet. With it you can attach photos (I intend to attach a photo of the item and a scan of the receipt it’s on). I’m a software engineer, and I had actually started out writing my own program to do this – but for $25 I thought I may as well just buy the one that already exists once I found it. Now I need to get on it and use it and get some insurance!

Thanks for this post. It has reminded me of the importance of getting these things taken care of. You never know what day you’ll lose your home and everything inside, I sure never expected it.

Kevin July 24, 2008 at 6:54 am

@Kym: Yea, if they’re giving you a hassle about documenting for insurance… then find another insurance company. Seriously. Mine wanted to know the structure of the building, etc., but it wasn’t too bad.

Sorry to hear about your experience. Hopefully you can learn from it 🙁

I think it is nuts that you can’t have scanned in copy of receipts. Here’s why: say you buy a computer at Office Depot (bad idea, but go with me here)… that paper receipt they give you will fade over time.

I can see someone standing in court going “Here’s my receipt!” and it’s blank. Then what?

Bobbi Jo July 24, 2008 at 2:51 pm

I feel so lucky at this point. Nothing like that has happened to me yet, but I know that I am not immune so I am prepared just in case. I wanted to add a point about receipts and insurance companies. I have spoken to many now, and they all say that receipts aren’t necessary particularly if there is a good photo of the item that can show the manufacturer’s or brand name. Now the exception to that is if it is an item that should be appraised in order to prove its value, such as an antique, collectible, or collection. Then I would definitely have it appraised, scan the appraisal, and store that somewhere safe.

xiLLeNtz July 25, 2008 at 11:23 am

I read this the other day and then just recently on DownloadSquad.com there was a link for one of these:

http://feeds.feedburner.com/~r/weblogsinc/downloadsquad/~3/343584872/

Debbie M August 8, 2008 at 10:04 am

I store things like this at work. It’s not in another state, so it’s no good for city-wide disasters, but it’s definitely good for fires, broken water mains, and tornados that don’t hit both the house and the workplace.

If you can copy your spreadsheet onto an online place like google docs, or attach it to an e-mail to yourself, that is a nice accessible far away well-backed-up place to store things, but then you have to evaluate the risk of having a list of all your (deliciously stealable?) stuff sitting out there in there on the web.

Kevin August 9, 2008 at 2:28 pm

@Debbie: That’s a decent idea, but I would be worried about someone stealing the information from work.

The online idea is a good one, several other people have commented on other posts with that idea. For some reason, I didn’t even think about that!

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