A home inventory is an important part of your homeowners insurance policy as it is used when filing a homeowners insurance claim. An accurate inventory ensures that you have the proper amount of coverage for the contents of your home as well as ensures that you receive the proper credit for your filed claim. Therefore, it is important to understand how to take a home inventory to prevent hassles and headaches in the future.
Homeowners Insurance: Why Take a Home Inventory
Your homeowners insurance policy will contain an overall amount of coverage for all items, except for expensive items which will be explained later. The home inventory is to help you arrive at this amount and to provide a record of the specific items covered in the instance that a claim must be filed. Once you perform your home inventory, be sure to keep a copy for yourself as well as the copy you send to the homeowners insurance company.
Homeowners Insurance: Taking the Home Inventory
Taking the home inventory can be a bit tedious, but it is worth it. It prevents being underinsured as well as prevents you from paying for more coverage than you need. You will need to create a list of the items you would like to be included in the coverage. Include in the list a description, a picture if possible, an estimated value and a receipt if possible. You will need to decide if you want replacement value or true value coverage. Replacement value coverage is more expensive, but the payout will be more if you must file a claim for damaged or destroyed items.
Homeowners Insurance: Determining Home Inventory Coverage Amount
With most homeowners insurance policies, the list will generally work in two ways if a claim is filed. If only some of the contents of the home are damaged, the list will provide the amount to be paid out to replace those specific items damaged. If the entire home is destroyed, the overall coverage amount for home contents will be paid out. To come up with this overall amount, simply add together the value (either true value or replacement value depending upon the type of coverage you want) and that is your overall coverage value for home contents. Of course, pay attention to the terms of your policy to know exactly how a claim is satisfied.
Homeowners Insurance: Scheduled Personal Property
Expensive items included in your home inventory may require their own separate policy riders. Most homeowners insurance companies require items with a value higher than $1,000 be recorded as scheduled personal property. Especially for these items, you need a picture, a receipt or a notarized appraisal showing the value of the property. Any time one of these items is added or subtracted from your home, you should inform your homeowners insurance company and have your policy updated.
Homeowners Insurance: Get Quotes When You Need Them
You can use homeowners insurance quotes to determine how different levels of home contents coverage affects your rates. Because insurance companies are so different, changing home inventories can change which company offers you the best rates. If you make a significant change to your home inventory, get a few homeowners insurance quotes to be sure you are still getting the most affordable rates.