If you can’t prove something exists, you can’t insure it. Sure, some rare exceptions to this maxim exist, illustrated by stories of certain insurance companies paying without documentation. But do you really want to risk it?
Knowing the onus will be on you to prove something exists, I recommend spending some time documenting each item of value that you own in the event of devastation. You shouldn’t have to spend much money to do so, as most modern families have a smart phone or a camera at their disposal. Plus, thumb drives are quite inexpensive, and many cloud-based storage providers are free for light consumer use. That’s important considering that if your house burns down, many of the normal documents and computer systems you currently have will no longer be available. You may also want to open a safe deposit box if you don’t already have one, as it can provide security for original documents as well as additional insurance and safety benefits.
With that being said, here’s how to actually go about documenting your possessions:
- Keep Purchase Receipts: Obviously, I’m not talking about service receipts, just for “things” that you buy. Groceries and other consumables (paper towels, for instance) don't count. Fortunately for consumer nowadays, if you buy stuff either online or even through a shop that uses Square you will get an email receipt. Keep these email receipts for everything you buy online and store them in a folder that’s backed up to the cloud. For the largest valued physical receipts that you have, you may consider scanning them into your computer and emailing them to yourself.
- Make A List Of Belongings Worth $1,000+: Using a spreadsheet program such as Excel or Google Docs, note the estimated date that you purchased each item, along with its make, model number and owner (if it is a business asset).And remember, we’re making this list for a special reason.
- Take Still Photos Of Each Item: A photograph goes a long way in establishing ownership of property, so it’s essential that you visually document every valuable item on your list – whether it’s with an iPhone or a high-end camera – in order to supplement your records. Again, make sure these pictures are stored safely in the cloud.
- Email Everything To Your Insurance Agent: Make sure the agent confirms receipt of your itemized list and corresponding pictures in writing. Also ask him or her to verify that your policies provide the proper level of coverage given your stated assets. Certain things on your list may require a valuable items endorsement, for instance, and some may not be covered at all if they’re owned by your business or a non-resident. But it’s certainly better to know before it’s too late.
- Make A Home Movie: Now, take your smart phone or video camera and slowly walk around your home while filming. Start in the garage and walk through each room. Open closets, drawers and filing cabinets; look everywhere. If items are stacked or hidden, flip through them to display quantities. Do this very slowly, filming the entire time. Finish by walking around the outside of your home filming furnishings that may be there.Do not forget the attic, basement, garage, on-site secondary buildings, etc. If you have stuff stored off site - such as a Storage Unit - contact your insurance agent. Note this is potentially a great job for a tween or teen. Watch the video for a few minutes to confirm that it worked.
- Create A Password-Protected Computer File: Call it something like, "Personal Possessions for Insurance, [Today’s Date]," and look for the option for password protection. Once you’ve gotten that figured out, add the spreadsheet, still photos and video footage. Consider adding a copy of your homeowners policy as well, if you have an electronic version.
- Backup This File To The Cloud: There are many effective cloud storage services readily available to people these days, including Dropbox, Box and Amazon.
- Save It To A Stick Drive: Place this stick-drive in a zip-lock bag and lock it in your safe deposit box at the bank or credit union.
- Update Your List Yearly: You don’t necessarily have to take new pictures and video annually, but you should strive to do so at least once every other year.
There are other forms of proof-of-ownership that insurance companies may accept, such as credit card statements or “claims of ownership.” But even assuming they accept your word, you will still need to be able to remember what you purchased. Quick, what did you buy from Macy's for $92.77 six and a half years ago? This can often be the sticky part. We would all like to think that we know what we own, but given a blank piece of paper, almost none of us can come up with a comprehensive list.
Documenting your possessions has other uses as well. By making a list of high-value items, you can better understand where the insurance coverage for things like jewelry or baseball card collections begins and ends.
If this list seems too complicated or too time consuming, just imagine how long this will take you after a devastating home fire. So take steps yourself to protect yourself and your family.
Image: FreeTransform / iStock.