Reviewed by Daniel Mirkovic
Your birthday just passed and you got a few nice gifts. Or perhaps you just celebrated an anniversary or promotion, treating yourself or someone else to a memorable new gift. Regardless of the occasion, it may be time to take a look at your home insurance, and make sure all your new possessions are covered.
The value of new cell phones, tablets, computers, game consoles and 4K televisions adds up quickly, possibly exceeding the limit of coverage provided under your existing home insurance policy. If a loss were to occur, you would still be subject to the limit of coverage that your policy originally provided. You’d be stuck paying out-of-pocket for any new items that you forgot to include in your coverage.
Most insurance policies have a strict limit on the total amount of coverage they provide for jewellery, and appraisals are often required in order to be fully protected. Forgetting to add new jewellery to your home insurance policy can be a serious mistake. Those strict coverage limits may leave you unprotected if the new jewellery were to be lost, stolen or damaged before you add it to your policy.
Insurance policies often impose a strict limit on sporting equipment, especially bicycles. One high-end mountain or road bike can easily exceed this limit of coverage. We recommend that you add up all items, and check with your home insurance provider to find out if you’re over the sporting equipment limit. You may need to increase it in order to ensure that your coverage doesn’t fall short in the event of a loss.
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Whether you own or rent your home, you should consider increasing your basic limit of personal property (contents) coverage. It’s a good idea to complete a household inventory every once in a while to see if the amount of your insurance is keeping pace with the actual amount of property you own.
A home inventory list is a written and/or photo record of all of the items you own—especially those with a high dollar value—that can be used for insurance purposes in case of a fire, theft, or flood. When you file a claim in these circumstances, you need to know which of your possessions are missing or damaged, as well as the value of those items. If you have the list, then it will alleviate a bit of the stress during a challenging time.
The home inventory list is a list of all your belongings. The list should include a description of each item (including make, model and serial number), the value of the item, and its approximate purchase date. If you have receipts, credit card statements relating to the purchase, or appraisal documentation, they should be attached to the list or stored in the same location.
The inventory list will help you determine whether you have adequate insurance coverage and whether your policy covers all of your possessions. If you have particularly valuable items, then you may need to add a rider to your policy to ensure they are covered. A conversation with your insurance agent will answer those questions.
In addition to a written list, you’ll want to create a visual record of your possessions so you have proof of ownership. Still photographs or video are both useful.
It’s a good idea to update your home inventory after the holiday season. Chances are you received a few gifts that you’ll want to add to the list. The longer you wait, the greater the chance that you’ll experience a loss with your new stuff unprotected. That’s a distressing thought.
If a crisis does occur, you’ll thank yourself for creating a home inventory list, because you won’t have to rely on memory for a list of belongings. During a stressful time, you’re more likely to forget items of importance when you file a claim.
To find out how much coverage you need, try our simple home inventory worksheet. It’s available as an Excel file that you can complete on your computer, or as a PDF file that you can print and complete by hand.
Creating a home inventory isn’t difficult; it simply requires a little time and attention. Follow this series of steps to ensure that your possessions are properly documented and insured.
Take a Walk. Walk through each room in your house with your spreadsheet, tablet, camera, or video camera in hand. Snap at least four photos of each room, making sure to include every side of the room so that you capture all of your possessions.
Add commentary. If you are using a video camera, you can add commentary as you focus on individual items, identifying them as you move along.
Go over areas used less. Be sure to include areas that aren’t necessarily used daily, such as your basement, laundry room, garage, and storage shed. Items in out-of-the-way places can also be valuable or worth documenting. It’s also worth looking into your closets and your drawers to document items stored there. Clothing isn’t cheap to replace, for example, and some of your jewellery might have both actual and sentimental value.
Make a list. Once you have visual documentation of your possessions, enter all the relevant data on a spreadsheet or into a computer application designed for inventories of possessions. The written data provides an important cross-reference for the visual record, as well as key details about the monetary value of your possessions.
Talk to an agent. Once you’ve finished your list, discuss it with your insurance agent. He or she can tell you if any of your possessions require special coverage and will be able to see if you’ve missed anything obvious.
Keep your home inventory safe. After your list is completed and approved, store it in a safe place away from your home. Try to choose a place that is unlikely to be affected by the same fire or flood that could threaten your home. In today’s digital world, you can store your list and visuals in the cloud, but you might also consider keeping it in a safety deposit box at the bank.
“An ounce of prevention is worth a pound of cure.” Don’t put off this task, as tedious as it may sound. Do one room each day or even each weekend until you’re finished. No one expects disaster to strike them, but why be unprepared?
Remember, insurance is intended for large, catastrophic losses that affect a great deal of your personal property. If you don’t choose a limit of coverage that can replace everything you own, you may find yourself paying out of pocket to repair or replace property beyond the limit of coverage that you have chosen.
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