This One Document Could Save You Thousands if You Need to Make a Home Insurance Claim

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Not having this document could make a property damage claim much harder.

Key points

• Home insurance can cover personal property.
• If a covered event occurs, a homeowner will need to make a claim.
• A home inventory can help property owners show the extent of losses.

Homeowners insurance covers damages to property due to a covered cause. This includes not just the dwelling itself, but also items within it. But homeowners need to make sure they have sufficient coverage for their personal property, and also proof of what they owned in the event they need to make a claim.

That’s where a home inventory comes in. 

What is a home inventory and how does it help with insurance claims?

A home inventory is a detailed inventory of all of your personal possessions in your home — along with details about their estimated value. While it can take some time to create this document, doing so is absolutely worth the effort.

Inventorying your home will help you see exactly how much property insurance you need. This can save you money over the long run because you can make sure you have a sufficient amount of insurance coverage to pay to replace everything you own in case it is destroyed by a covered event. If you do not realize how much your possessions would cost to replace, your personal property policy limits could be set too low and you could be forced to pay a lot of money out of your own pocket to replace your things.

A home inventory can also help you make an insurance claim and ensure you get the full payout you deserve. If you do not have any documents showing the extent of the property you lost in a covered incident, the insurer may not pay out as much money since there will not be sufficient proof of loss. Or homeowners may forget to make a claim for certain possessions since it can be difficult to remember every single item they own. This could also lead to a reduced payout since the insurer simply would not know about all the property that exists that must be replaced.

How to make a home inventory

Making a home inventory is vital, but it can seem like a lot of hassle. After all, few people want to document every single thing they buy or own just to make sure an insurance company pays for all of these items in the event of a covered loss. 

The good news is, there are tools that can help make the process of creating a home inventory easy. Many insurance companies have templates or forms on their websites, while there are also apps that can help streamline the inventorying process.

It’s not always enough to make a simple list, though. Taking photos of personal property can help provide proof to an insurer of the property’s existence as well as its value. If an insurance company has questions about whether a payout should be made, this evidence of personal possessions that were destroyed could prove to be invaluable.

Of course, no one ever wants to make an insurance claim — or even to think about doing so — but it’s well worth taking the time and making the effort to prepare in case the worst occurs.