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An answer to the question Spring cleaning for your finances? Is there any activity that should be done annually, with respect to your money? mentioned home inventory:

The Inventory is also very important. This is used in the event that you have a fire or some sort of disaster that requires you to give a statement of any items you had in your home. This is a very difficult thing to go through, and having this statement ready to hand over only makes thing easier. There are a couple ways to do this. Some people take pictures of everything they have in their house and make notes of prices and values, some people take a video of the whole house, and some people write down item by item on the computer or on a piece of paper. Whatever way you would like to do it is fine, what works for one person does not necessarily work for the other.

I'd like to know what the best or even "correct" way to take inventory actually is. Specifically:

  • Are pictures necessary?
  • How detailed do you get? Obviously if you set out to inventory every item worth $5 or more, you are never going to finish. But, those small items definitely add up in value, and if your home was destroyed, is any insurance allowance made for replacing those small things? Can you make an estimate in aggregate? (such as, $1000 in clothes)
  • Do you need receipts? Detailed model numbers (for electronics, appliances, etc.)?

Also,

  • If your home is destroyed and you have an inaccurate inventory or no inventory at all, what does insurance provide for replacement of property?
  • Maybe more importantly, will insurance even care about your own personal inventory? (Isn't it easy to scam, through value inflation?)
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2 Answers 2

It all boils down to this: If you don't have a record of what you own before a fire happens, you can't get it after the fire happens.

The more records you have, the better. Proof of sales price. Proof of authenticity. Condition. Quantity. If you have to prove value, you'll be glad you have the records.

It makes sense also to see what kind of things are not covered. Is art covered? How about coins or jewelry? A stamp collection? Antiques? If replacing these kinds of things is important to you, then make sure you (a) have insurance for it, and (b) can demonstrate its value with your records (purchase receipt, appraisal, etc.)

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There are software programs out there to do an inventory, but I haven't used them. My wife works for an insurance company, and they have forms and specific documentation for your valuable things. You certainly know what your big ticket items are.

For myself, I simply use my video camera and walk around the house as if I was taking a walking tour. On the way I describe what is in each cupboard and chat about it. If I have any idea of what it cost I say so, otherwise I don't

Then I upload the video to a website I own for safe keeping. (I have never looked at the videos a second time or told my insurance company about them.) I don't really have much in the way of expensive items. Mostly I take a video of my computers, electronics and my wife's jewelry box.

The big point is to get an idea of what is in each room if my house burns down. The video is supposed to make it easy for me to review and remember should a tragedy happen and I need to justify costs to my insurance company.

From my understanding, they will replace the value of the contents of my home up to a certainly value, regardless of what it is. So I just want a quick list.

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