If you just obtained a homeowners or renters insurance policy, you’ll enjoy the peace of mind that comes with it. The personal property coverage portion of your policy helps cover the cost of replacing possessions that are damaged, lost or stolen. However, the only way to back up your insurance claim is to prove what items you owned and how valuable they were before they were lost or destroyed. This requires you to make a home inventory of your most valuable possessions.
While 90% of homeowners are concerned about protecting their homes, only 10% have their belongings documented in a home inventory. If you’re ready to prepare for the unexpected, here’s what you need to know.
10 Things to Include in Your Home Inventory
Your home inventory should include a list of big-ticket items that can be easily valued and replaced. The top 10 things to include on this list are:
- Computers and laptops
- TVs
- Game consoles
- Major appliances
- Furniture
- Jewelry
- Musical instruments
- Collections (stamps, coins, artwork)
- Firearms
- Expensive cameras
How to Place Value on Belongings
The easiest way to inventory your belongings is to save digital pictures and videos to your hard drive and in the cloud to ensure you can access this proof of ownership following a disaster. Then you need to prove the value of your belongings, which you can do by taking a picture of the original receipt (with the price and date of purchase) and the item’s serial number, if applicable.
Depending on the type of coverage you have, your insurance company will help replace your belongings in one of three ways:
- Actual cash value: This is the item’s replacement cost minus depreciation. Essentially, your items are covered for as much as you could sell them for at a garage sale.
- Replacement cost value: This is the amount it would cost to purchase your belongings new at the time you make your claim, resulting in a higher claim amount.
- Appraised value: Because it’s difficult to value one-of-a-kind antiques or items with sentimental value, you should have these belongings appraised and documented with your home inventory. Then your insurance company will reimburse you the appraised value when you make your claim.
Consider Scheduled Personal Property Coverage
Standard homeowners and renters insurance policies place dollar amounts on individual items or categories of valuables, such as jewelry. For example, if your plan has a sub-limit of $1,500 but you own a $2,000 necklace and earring set, the items will only be covered up to the sub-limit.
That’s where scheduled personal property coverage is useful. This optional add-on increases the limits on specific high-value belongings. To get extra coverage, you must have your belongings appraised by a professional.
How to Have Irreplaceable Items Appraised
To receive a genuine appraisal your insurance company will be satisfied with, you must find an appraiser that meets professional and ethical standards. The appraiser’s written report should include an item description and the process used to estimate its worth (actual cash value or replacement cost value).
You’ll need to pay for the appraiser’s time, which might be a flat fee or hourly rate. Avoid appraisers who charge a percentage of the item’s value. If the appraiser thinks the object isn’t worth the cost of a written appraisal, he should tell you at the forefront and not charge you his service fee.
If your home is damaged in a natural disaster, you need to do more than replace destroyed belongings. You also need to restore your home to its pre-disaster state. To schedule restoration services with a reputable company, please contact Rainbow Restoration® for help.
