What Do You Have to Lose? Don't Wait for a Home Disaster to Find Out

June 16, 2010

Off the top of your head, could you name the make and model of the television in your family room? What about listing all of the tools and gardening equipment you own? Could you accurately describe the window coverings in every room of your home—or the kind of mattress in each bedroom? How about the type of processor, RAM and hard drive that's inside your computer?

Like most people, you would probably find it difficult to fully answer all of these questions from memory. So what if your home was completely destroyed in a disaster like a fire? At an already emotional time, you could find yourself struggling while an insurance adjustor asks you to precisely describe everything that was in your house. Worse still, without an accurate list of your possessions, you could experience delays in having your insurance claim settled.

Thankfully, there are some simple steps you can take right now to help avoid those problems.

Take Inventory!

An up-to-date inventory of the items in your home and a record of their value will be helpful to you and your insurer in the event of a loss (and the police in the event of a burglary).

There are different ways you can go about creating this inventory. If you're making a written list of your possessions, be sure to note makes, models and serial numbers where applicable. Making a drawer-by-drawer, room-by-room video recording is another option, as is using a camera. An audio cassette recorder would be useful too—since it can capture more details than you could achieve with a camera (such as a description of your computer's inner components). Websites like www.knowyourstuff.org offer free home inventory software tools you can use as well.

For bigger-ticket items (such as furniture, appliances, computers and other electronics), consider making copies of the purchase receipts—and storing these documents with your inventory list.

Assemble a "Financial Emergency Kit"

Along with an inventoried list of your household items, also consider creating a "financial emergency kit"—containing essential information to help keep your family finances running smoothly in the event of a disaster at your home.

Consider including within it:

  • Insurance Information—including copies of your homeowners', auto, disability and accident policies, as well as the insurers' emergency claims assistance phone number
  • Payment Obligations—the billing contacts for the providers of your mortgage; credit cards; as well as auto, student and any other loans—along with the due dates, minimum required payments and other payment information
  • Personal Financial Information—such as your bank and investment account numbers, as well as credit card numbers

Keep It Secure and Current

Obviously, your inventory and financial records will serve no purpose if they go up in flames with the rest of your household possessions. Therefore, it's wise to store these documents in a safety-deposit box or other secure location away from your home—such as under lock-and-key at your dental practice (provided of course, that your home and office aren't located in the same structure). Also remember to periodically update these records—such as after renovating, redecorating or making a major household purchase.

(A side note: It's also advisable for dentists to keep an inventoried list of their practice contents off-site, in the event of an office disaster.)

A 'Valuable' Home Insurance Tip

If you have valuables in your home like jewelry, works of art, antiques or other collectibles, it's important to ensure your home insurance will provide adequate compensation if these items are lost (in a fire, for example).

Many people don't realize that most home insurance policies impose specific limits on the amount of compensation that can be paid for these types of items. Therefore, consider purchasing additional coverage for these types of objects, in the form of an "endorsement" or "rider" to your homeowner's policy.

THE AUTHOR

Ms. Braganza is senior insurance advisor, CDSPI Advisory Services Inc. Email: insurance@cdspiadvice.com

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