Home Insurance Articles
Documenting Items For Home Insurance Purposes And Three Reasons It Is Prudent To Be Thorough
2010-05-15
Most homeowners and renters understand the importance of purchasing a home insurance policy yearly. However, many policyholders are not aware of the significance of documenting household possessions annually. In fact, less than 40 percent of policyholders compile a home inventory. This may seem like an onerous task, but there are crucial reasons why home insurance documentation is vital. These reasons are promptly listed below in detail.
One reason for gathering home insurance documentation is memories diminish with time. Scientists believe recollection of events decreases as subsequent memories are created in the interim. You may remember large purchases you made, such as furniture or appliances, but it is not likely incidental expenditures, for instance, socks, will be retained. Yet, insignificant items can amount to large sums of money, greater than even the cost of living room furniture. If you were to sit in one room of your home and mentally calculate the cost of everything you see in that room, it is probable you might substantially underestimate the tally. This brings home the second reason for completing a household inventory. Insurance policies have monetary limits the insurer will not compensate above. Documenting your possessions is the most reliable method of ensuring you obtain enough insurance coverage to replace every item in your home, right down to the last teaspoon.
A third compelling reason to assemble home insurance documentation relates to processing of a claim against your policy. Insurance companies demand proof of lost documentation to substantiate claims. An insurer typically requires details about the nature of the loss (i.e. fire, flood), date of loss, the purchased value of each and every item damaged or destroyed individually listed, receipts verifying purchase and the current replacement cost for each possession. If you do not have a recent inventory, it may be impossible to precisely ascertain these particulars. A home inventory reduces the length of time and stress involved in receiving compensation; this may prove invaluable when you are already dealing with a catastrophic occurrence.
Home inventories can be prepared in several ways: manually with paper and pen, with a video camera or digital camera, with widely available software or hiring a home inventory business. It is advisable to back up paper inventories with photographs and vice versa. Store one copy of the inventory, with receipts and other corroborating records, at a location outside the home. Storage options can be a safety deposit box, attorney's office, insurer or insurance agent's office or a trusted relative or friend. Failure to accurately determine the value of your possessions and purchase an appropriate home insurance policy could adversely affect your financial health for years to come.