No one wants to consider the possibility of a major loss to our home. However, a fire, hurricane, or flood can do significant damage to your house and all the personal property within it. And most people couldn’t easily create an accurate list of those items after the fact.
You might not give much thought to the personal property portion of your homeowner’s policy, but it impacts whether you’re protected sufficiently and what happens after a loss. A home inventory helps ensure you have the right coverage, streamlines the claim process, and maximizes your claim payout.
How Personal Property Coverage Works
In the context of homeowner’s insurance, personal property refers to the contents of your home, such as furniture, stand-alone appliances, electronics, and clothing. High-value collectibles like fine art, guns, wine, and expensive jewelry are also critical to insure, but most homeowner’s policies apply sub-limits to these items. That means if the item is destroyed or lost due to a covered incident, the insurer will only cover it up to a specific limit. So it's best to insure high-value items like these with a stand-alone valuables policy.
For all the other contents of your home, the personal property coverage included in your homeowner’s policy should suffice. Most homeowner’s insurers set the personal property coverage limit at about 50% of your total dwelling limit, without requiring you to itemize your contents. For example, if your home is insured for $4 million, it’s likely your homeowner’s policy includes about $2 million in personal property coverage.
Whether this default limit is right for you depends on the personal items you own and their value. To avoid the risk that you are overinsured or underinsured, your independent insurance advisor will ask whether you’d like to adjust the insurer’s default limits.
Why a Home Inventory is Essential
Taking an inventory of all the personal property in your home is important for three reasons:
- It guides your decisions when purchasing homeowner’s insurance. The only way to determine whether the insurer’s default limit for personal property is sufficient is to document your home’s contents and their value. If you have a custom-crafted dining room table, a large assortment of designer handbags, and a lot of high-end electronics, you might need more coverage than the insurer initially offers.
- It simplifies and speeds the claim process. After a major loss, the last thing you want to do is try to recall all your personal property. Even if you can pull together a list of contents quickly, you certainly don’t want to wait for the insurance adjuster to determine their value or become embroiled in a lengthy negotiation. It’s easier and faster to pull up a comprehensive inventory that includes supporting documentation.
- It helps optimize your claim payout. If you have a loss and need to make a claim for lost or damaged property, the insurance company won’t write a check for the entire amount of your personal property coverage. They’ll require you to submit a claim for the particular items involved. In the unfortunate event that your home is completely destroyed, there will be no evidence of what you owned unless you’ve taken an inventory. Even a partial loss can damage some contents to the point of recognition.
Easy Ways to Take a Personal Property Inventory
The idea of documenting all the personal property in your home might seem daunting, but technology makes it relatively simple.
One of the easiest ways to document personal property for insurance purposes is to walk around your home and take a video of every room using your smartphone. (You could also take photos, but a video is just as useful and often less time-consuming.) Leave no stone unturned as you look in every closet, open every drawer, and check every cabinet. If you store personal items in your garage, a car, or a storage unit, be sure to include those, too, as some homeowner’s policies cover those circumstances.
There are also AI-powered apps that guide you through this process, along with consultants who will do the work on site. Or if you’re so inclined, you can hire a company to set up a drone to fly around your home and capture images of everything you own. Most carriers that insure high-value homes provide a free risk consulting service, and some recommend vendors that conduct home inventories.
Whichever approach you take to developing the inventory, it’s just as important to gather any documentation that proves the value of your personal property, such as receipts and bills of sale. The insurer’s adjuster can estimate the value using a database or online research, but it helps your case if you have proof of what you paid for the item or its appraised value.
Of course, your inventory is only useful if it’s current. Whenever you purchase a big-ticket item, add it to your inventory video, photo gallery, or spreadsheet. Then store the documentation in multiple places—digitally or on paper, including an off-site location—so it’s easily accessible and not at risk of being destroyed or lost if your home is damaged.
Turn to B. F. Saul Insurance to Protect Your Home
The personal insurance specialists at B. F. Saul Insurance help successful individuals and families protect what they value, including primary homes, secondary homes, and personal property. Our team works closely with insurers that specialize in covering high-value homes and their contents, providing you with invaluable peace of mind. We’ll guide you in obtaining the right homeowner’s insurance at the right price, along with other coverages that are essential for those with a high net worth or significant assets.
Contact B. F. Saul Insurance to review your homeowner’s insurance policy and ensure you’re properly covered.
