Inventory Personal Effects to Speed the
Insurance Claims Process
After Coronavirus and more than a year in lockdown, people are looking to buy themselves something special. According to McKinsey & Co this year, “more than 50% of U.S. consumers expect to spend extra on themselves.” (1) Whether you’re planning to buy a big flat screen tv, a piece of expensive jewelry, a few pairs of Louis Vuitton shoes, new furniture or appliances, keeping track of purchases and creating a home inventory is an important step in planning for the unexpected.
Be Prepared for the Unexpected
Each year Massachusetts homeowners contend with weather systems creating wind, water, and other weather-related damage to their homes. According to ISO, about 6% of U.S. homes experience a property claim each year. (2) So, while it’s unpleasant to think about something unfortunate happening to your home and having to file an insurance claim, you should be prepared just in case.
If a thief ransacked your home, faulty wiring caused a fire that burned several rooms, or wind and hail caused extensive water damage, would you be able to remember all your possessions in order to file a claim? The moments following a loss, can be stressful, traumatic and are not the best time to accurately recall your personal belongings. And each item you forget, is money you won’t be able to collect from your claim. Which is why it’s important to create a home inventory with photos and video documentation, before disaster strikes.
The Benefits of Creating a Home Inventory
Creating a home inventory may seem like a daunting task (especially if you’ve owned your home a long time), but there are many benefits, including:
- Helps to settle insurance claims faster and ensure your homeowners’ insurance policy includes adequate coverage and limits for your specific needs.
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- A typical homeowners’ insurance policy includes coverage for your personal belongings that reimburses the loss, minus your deductible. However, most homeowners’ policies limit coverage for possessions to 50-70% of your dwelling coverage. In other words, if your homeowners’ provides $300,000 in coverage for your home, you’d have between $150,000-$210,000 of coverage for all your possessions, based upon your individual policy.
- Covered items typically include:
- Appliances
- Furniture
- Electronics
- Clothing
- Bicycles
- Lawn care equipment
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- Items such as jewelry, art and other collections are covered from the perils listed on a typical homeowners’ policy (fire, theft, etc.) but may be limited to only $1,000 to $2,000 of coverage. These items are better protected by a separate personal articles floater or endorsement added onto the homeowners’ policy.
- Helps you keep track of your belongings as they accumulate throughout the years.
- Can help verify losses for an income tax return. (2)
McSweeney & Ricci Claims Manager, Julianna Parvani states,
“Taking inventory of the belongings in your home is essential to expediting the claims process, should an unfortunate event take place. It’s best to include the value for the items in your inventory so your claims adjuster can easily navigate the list, and ensure the claim is paid adequately for the covered items. An inventoried list of the items in your home makes all the difference in replacing your lost items through insurance, rather than your wallet.”
Despite its advantages, many homeowners have not created a home inventory. According to the National Association of Insurance Commissioners (NAIC),
Only 44% of Americans have an inventory of their personal belongings and of those who do: one-third don’t have photos and 58% don’t have sales receipts. (3)
McSweeney & Ricci suggests that the number of Massachusetts homeowners maintaining a home inventory is much lower than the NAIC’s figure. After more than fifty years of providing claims assistance, the professionals in our on-site Claims Department find that most clients filing claims have not created a home inventory.
Home Inventory Basics
Your home inventory can be a simple written list but providing pictures and videos makes for a more detailed description in the event of a claim. Today’s smart phones are great tools that make the task of creating a home inventory easier and faster.
A complete home inventory catalogs all the personal items you own and should include those kept in your home and any you may have stored off-site. Follow the steps below to create a home inventory of your personal effects:
- Work room by room chronicling as many belongings as possible. Take extra care to include large expensive items such as appliances, furniture, and electronics. List your clothing and shoes as well. For personal effects such as utensils, books, clothes and shoes, just record the quantity of each item and not each individual item. Document separately any expensive items such as designer shoes or handbags.
- Don’t neglect sheds, storage spaces, garages, closets and drawers.
- Include a description of every item. Include the make, model, and serial number if applicable and the date you acquired the item. For items with a warranty be sure to document the length of the warranty.
- Include an estimated value of each item. Include sales receipts for any big-ticket items.
- Take clear photos or video each item.
- Photograph items individually or if using video, slowly pan over each area of your home. Also take photos or video any receipts and appraisals you may have.
- Your Inventory should be editable so when you decide to replace your TV, refrigerator or hot tub you can just plug in the new information or when you make a new purchase it’s easy to add it to the list and attach the receipts at the same time.
- Store a digital copy of your home inventory in the cloud or keep a physical copy off-site for safekeeping.
- Be sure to update your inventory regularly, especially after making large purchases.
Tools to Simplify the Process of Creating a Home Inventory
The task of documenting your personal belongings may seem time-consuming and overwhelming, but there are numerous resources available to assist you in the process:
- For your convenience, we’ve provided a free home inventory checklist on our website to help you document your possessions.
- There are many free home inventory apps that will allow you to use your smartphone or tablet to list your items as well as take photos and videos. One popular choice is the app provided by the National Association of Insurance Commissioners (NAIC) home inventory app, (which is available in the App Store or through Google Play).
What To Do After You’ve Completed Your Home Inventory
Once you have inventoried your items check the declarations page of your homeowners’ insurance to see what your contents limit is. Does it seem adequate to replace the personal belongings on your list? Keep in mind:
- A home insurance policy that covers replacement value will pay to replace your items, while an actual cash value policy pays only the depreciated value of your items.
- Your expensive items such as jewelry, art and other collections will have a limit on a standard homeowner’s policy and may need to be protected by an additional endorsement.
- While your homeowners’ policy will cover your personal possessions from weather-related damage, flood damage is not covered by traditional home insurance policy and requires a separate flood insurance policy.
We hope you never have a loss, but if you do experience a fire, theft or weather-related damage and need to file a homeowners’ insurance claim, the insurance adjuster will need a detailed description of damaged or lost items. “The more thorough your home inventory, the faster the claims process will go, and the better your chances will be of recovering the full value of your belongings.” (4)
If after inventorying your items, you’re questioning whether your homeowners’ insurance is enough to replace your belongings, contact your dedicated McSweeney & Ricci Personal Lines Account Manager and ask about higher limits for your personal possessions. They’ll be super proud of you that you created a home inventory, and may even give you a shout out on social media for being the awesome client you are! 😉
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