Homeowners insurance providers say the same thing: You should create an inventory of the furniture, electronics, jewelry and other valuables in your home, with a video or photo inventory being the best form of documentation.
The reason? If your valuables are stolen or damaged, you can use your video or photo inventory as visual proof that you owned these items. Such an inventory can also provide evidence that your valuables are worth as much as you claim.
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But here's the challenge: How exactly do you compile a video or photo inventory? What do you need to film, and what items should you snap photos of? Is the camera or video recorder on your smart phone good enough for this task? And how often do you need to update this visual inventory?
Insurance pros say there is no set rule for how to compile a visual inventory. The goal is to provide enough video or photographic evidence to allow insurance adjustors to accurately determine how much that laptop, TV or love seat is worth. If you want to get the most money possible after a disaster or break-in then take the clearest photos or the best video possible of your most valuable items.
Skipping this minor task could cause major regret later.
"Very often, homeowners learn of the importance of a home inventory after a loss," says Scott Congiusti, assistant vice president and personal insurance claims director at insurer HUB International Northeast in Woodbury, New York.
Do you need to take a home inventory?
Think you don't need a photo or video inventory? Congiusti uses the example of a hypothetical married, professional couple that has lived in a 2,000-square-foot home for 10 years.
"Think about all of the items they have acquired over the 10-year period," he says. "Now, imagine all of their possessions disappear at once and someone is asking for a list with approximate values, ages and descriptions for all."
Congiusti says that homeowners shouldn't worry too much about how they film or photograph their items. What matters most is actually taking the inventory. Owners don't need to film 36 hours of video. And they don't need to spend 10 minutes filming or snapping photos of every item in their homes.
The goal, he says, is to provide a broad view of what is in the home and some hints about the quality of these items.
"Something is better than nothing," Congiusti says.
Congiusti does say that it is important for owners to store their vidoes or photos offsite -- you don't want it destroyed when your other items are damaged -- and in more than one location.
"If the video is on an SD card and the SD card is in the home during a fire, it would not be much help," Congiusti says.
Owners can be selective, too, on what they film or photograph, Congiusti says. They might not, for instance, take photos of every pair of jeans they own or every pair of shoes. But for particularly expensive items filming and snapping photos are important.
"It might not be possible to have photographs, videos and receipts for every clothing item," Congiusti says. "But if a policyholder knows that he owns 10 suits from Brooks Brothers worth $1,000 each, and other furnishings and items with the home are of comparable quality, it will be much easier to document the loss and settle with the insurance company."
Record more than just high-end items
Sean Scott, a fire-restoration contractor, says that while it's important for homeowners to focus on their most expensive items, this doesn't mean that they should ignore those pieces of furniture, electronics and personal items that don't come with giant price tags.
Scott recommends taking photos and/or video of every detail in and around your home, including in the attic and outside storage sheds.
"Remember, everything you own was purchased with hard-earned money," Scott says. "Even small-ticket items can add up fast. Open drawers, cupboards and closets, and document the contents of each so you will have a record of what you had. This will be your proof in the event you experience a catastrophic loss."
Scott Johnson, an insurance agent with Marindependent Insurance Services in Marin County, California, says homeowners should first make a list of everything in their homes that is worth $1,000 or more.
"Many of these items will naturally be covered by a typical home insurance policy, but deciding what is and is not will be up to the insurance agent," Johnson says.
Next, he tells homeowners to use their smartphones to take photos of all of these more expensive items. Then he recommends that owners walk around both the outside and inside of their homes slowly, with their smartphone's video running. Owners should open all of their closets and doors, and, as he says, film "every nook and cranny."
As a final step, owners need to back up their photos and video with a cloud-service provider. They should also send their photos and video to their insurance agent for an analysis.
This isn't a difficult task, Johnson says.
"A 10-year-old can do most of this, no problem," he says.
If you don't trust your own photo or video skills, you can always pay for a professional.
Do you need to hire a private appraiser?
Mildred Ayala, vice president of private client services also at Hub International Northeast, says that homeowners who hire a private appraisal firm will increase the odds that all of their valuables will be documented properly.
Ayala says that many of these firms do travel to clients' homes and photograph those valuables that homeowners most want to insure. These firms will also appraise the value of these items and provide their clients with a record of these appraisals.
Ayala recommends conducting this type of in-home appraisal every seven to 10 years.
Just documenting valuables, though, isn't enough for homeowners. Ayala says that owners should invest in a replacement-cost policy instead of one that reimburses them on an actual-cash basis. If your TV is damaged or stolen, a replacement policy would pay out what the cost of a replacement TV would be today.
A policy that instead relies on actual cash value will payout what the TV was worth at the time it was stolen or damaged. If that TV was seven years old, the policy might not provide enough cash value for you to buy a replacement at today's costs.
Ayala also recommends that homeowners with a lot of expensive possessions take out a valuable-articles policy so that they can get enough of a pay-out to cover the costs of these items.
"Valuables such as jewelry, fine art, furs, silverware and collectibles should be covered under a valuable-articles policy to ensure the broadest coverage," she says.