In the event of an unexpected disaster or theft, could you accurately account for all your belongings? That’s where a home inventory comes in. Keeping a home inventory will give you peace of mind that if a stressful situation arises, you’ll be able to navigate the process of insurance claims and rebuilding your home and life.
Key takeaways
- A home inventory is a detailed list of all your personal belongings and valuable items, including essential information like purchase dates, receipts, invoices and appraisals.
- Whether you’re a renter or homeowner, it provides detailed documentation of your belongings for any home insurance claim, tax deductions and estate planning.
- A good home inventory includes comprehensive details such as item descriptions, categories, serial numbers, purchase dates, purchase prices, current values, conditions, locations and photos/videos. You can use a spreadsheet or home inventory app.
What exactly is a home inventory?
A home inventory is a detailed list of all the personal belongings and valuable items in your home. In addition to itemizing your belongings, it includes key information about each item (we’ll get more into that later).
While building an inventory can sound like a daunting task, it’s important for many reasons. It helps you:
- Assess your coverage needs: Many people ‘guesstimate’ the amount of coverage they need. But by taking inventory and knowing the replacement value of your belongings, you can determine more accurately how much insurance coverage you need.
- File claims: It serves as proof of ownership and may help streamline the entire claims process. From an insurance company standpoint, it provides documentation to support your claim and helps ensure you receive appropriate compensation for your losses.
- Estate planning: You can also use your home inventory to document assets and personal belongings for inheritance purposes. This can help executors distribute assets according to your wishes.
Who needs to keep a home inventory?
According to a 2023 Triple-I/Munich Re Consumer Survey, only 47 per cent of homeowners said they prepared an inventory of their possessions to help document losses for their insurers. While this is U.S. data, it’s likely representative of numbers in Canada too, which would mean about half us do not have a home inventory.
Anyone who wants to protect their belongings, accurately assess their insurance needs, streamline insurance claims or manage their estate effectively can benefit from creating and maintaining a comprehensive home inventory. This includes:
- Home and condo owners: A home inventory will help both home and condo owners accurately assess their insurance needs and ensure their belongings are adequately covered in case of damage, such as theft or loss.
- Renters: Renters can use a home inventory to document their personal property for renter's insurance purposes. This helps you determine the appropriate coverage amount and streamline the claims process if their belongings are damaged or stolen.
- Cottage or cabin owners: If you own a second or recreational home, it’s important to create a second home inventory so you’re clear on what items are in one residence versus the other.
The nitty gritty: Key information you'll need for a home insurance claim
Now you can see the usefulness of a home inventory, you may be wondering where to start. First, relax; building your first home inventory can be a bit of a process. We recommend chipping away at it slowly and steadily, doing a room every few days spread out over as many weeks as it takes.
If you’re creating a home inventory spreadsheet, include detailed information about each item. Your insurance representative may provide a template to follow, but here are some suggested columns or information fields you can include in your spreadsheet. You can also tweak this list for your own needs:
- Item description: Describe the item briefly. For example, "Samsung 55-inch Smart TV" or "Leather Sofa - Brown."
- Category: Categorize each item (e.g., electronics, furniture, jewellery, appliances, clothing, etc.).
- Serial number: Especially for electronics and appliances.
- Purchase date: Record the date the item was purchased. This helps determine depreciation and replacement value.
- Purchase price: Keep receipts or invoices as supporting documentation if available.
- Current value: This can be based on its depreciation or its current market value if it's an appreciating asset.
- Condition: E.g., excellent, good, fair, poor.
- Location: E.g., living room, bedroom, garage.
- Additional notes: Include any additional information that might be relevant, such as special features, customization or sentimental value. You might also want to note the store or retailer you bought the item at.
- Photo or video: Visual documentation is important for proving ownership in case of an insurance claim.
- Insurance policy information: E.g., policy number, insurer, coverage limits and deductible.
- Appraisal or valuation: Any appraisals or valuation documents if the item is of significant value (e.g., jewellery, artwork).
A home inventory with this information will help insurance adjusters understand what has been lost or destroyed and provide a very comprehensive overview for estate planning purposes or simply for keeping track of your belongings.
How detailed should you get?
It’s normal to wonder how exhaustive your list should be. The answer is really: “It depends.” Here are some considerations:
- High-value items: Work through these items first, as they are your big-ticket items. These include things like electronics, jewellery, artwork, large furniture, etc. High-value items can sometimes have limits, so check your policy to ensure you’re adequately covered.
- Group lower-value items: For multiple items with lower individual values (e.g., clothing, kitchen utensils, books), you may choose to group similar items together rather than listing each one separately. For example, you could list "Kitchen Utensils - assorted" or "Books - Fiction Collection."
- Threshold for detailed documentation: Some insurance policies have specific thresholds for requiring detailed documentation. For instance, items above a certain value (e.g., $1,000) may need individual listing and appraisal. Check your insurance policy to understand these thresholds.
- Personal preference: Your personal preference and organizational style also play a role. Some people prefer a highly detailed inventory for thoroughness and clarity, while others may opt for a more streamlined approach, especially for items of lower value.
- Other considerations: If you’re using your inventory for estate planning, there may be lower-value but sentimentally important items you want to give a dedicated line to.
What’s the best tool to use when creating a home inventory?
There are several tools and methods you can use to keep a home inventory, each with its own benefits depending on your preferences and needs. Ultimately, choose the tool that feels most convenient and accessible to you.
Remember: Regular updates to your home inventory are also crucial, especially when you acquire new items or dispose of old ones, so choose your tool with that in mind. Here are three popular approaches:
1. Spreadsheets or cloud storage
Using software like Microsoft Excel or Google Sheets is a straightforward approach. You can customize columns and rows to include descriptions, values, photos and other details. These tools are flexible and widely accessible.
Storing multiple photos and documents in cloud services can complement your inventory spreadsheet or app. This ensures you have backups of important documentation.
2. Home inventory apps
You can also use a dedicated home inventory app—there will be both paid and free options. These are designed specifically for creating and managing home inventories. These apps will usually allow you to download the inventory as a PDF file.
3. Pen and paper
If you prefer a low-tech approach, you can opt for a handwritten inventory list. However, this may be less efficient for documenting items with detailed information and photos.
Final tips for creating and maintaining your home inventory
Some final tips for creating and managing your home inventory include:
- Storage or access and emergency preparedness: Store these documents securely and consider keeping copies in different locations (e.g., physical copies in a safe, digital copies in the cloud).
- Insurance review: Annually review your insurance coverage to ensure it adequately covers the value of your belongings. Your home inventory will help you determine if adjustments to your coverage are needed. Renewal time is the best time to have these discussions. Contact your insurance representative if you have any questions!
- Digital security: If you’re using digital tools or apps for your inventory, prioritize security. Use strong, unique passwords for accounts, enable two-factor authentication where available, and choose reputable apps or software with good security practices.
- Consideration of valuable items: For high-value items such as jewellery, artwork, musical instruments or collectibles, consider getting professional appraisals to assess their worth accurately.
- Disaster recovery plan: In addition to your inventory, consider creating a broader disaster recovery plan for your home. This includes procedures for evacuation, contact information for emergency services and a list of important documents and valuables to take with you in case of evacuation.
