How to Document for Homeowners Insurance
Think your insurance will cover you in case of a disaster? Read these 3 tips to learn how to document for a homeowners insurance claim.
Tornadoes, hurricanes, and break-ins, oh my!
All the reasons that you would need to file a homeowners insurance claim are stressful and unpleasant. Just look at what’s happening in the Northeast this week!
While most people have homeowners or renters insurance, many do not have the proper documentation to ensure that they will receive the maximum amount possible when they file a claim. Today’s tips will help you learn the steps you need to take before the disaster happens to be certain that you can prove your losses to your insurance company.
Tip #1: Document What You Own
I know you are an honest person, your Mom knows you are honest, but the person on the other end of the phone at your insurance company does not know you are honest. They have to operate under the assumption that you are going to try and add in lots of things you don’t really own into your claim after a disaster. The insurance companies have standard amounts that most homes fall into, kind of like an average of how many people live in your type of home. If your claim is above that standard claim amount, you better be able to prove why.
To document your belongings, simply start taking pictures or videos of your stuff. Walk through your home and get images of your property, especially bigger ticket items like electronics, appliances, and even clothes. The more high-price items you have, the more detailed you need to be with this process. If you have a collection of Louis Vuitton luggage and purses, get pictures of the entire set, as well as the inside and outside of each bag (to prove they’re real and not knock-offs). Make sure you also get the condition of each item fully documented, too.
Even the items that aren’t designer, but are still above average cost should be documented in this detailed way. I’m talking about things like your $300 kitchen mixer, the $600 cookware set, or that fancy $800 vacuum. You can get all these items for under $50 at discount stores, so you need to be ready to prove that your items cost 10 times that much.
For all electronics and appliances, make sure to document the make and model number. This may seem like overkill if you already have the pictures of the items, but remember that you are going to have to prove you really do own these items, rather than simply keeping them in your home. Besides, if your “natural disaster” comes in the form of a burglar, the model numbers could help the police track down your items if they get pawned or sold.
Tip #2: Document Value
The most common way people try to document their purchases is by saving their receipts. This may be sufficient if you need to return the item to the store, but you need to go a little more high tech if you want to really prove your ownership of possessions on an insurance claim. Think about it, if you save all the paper copies of your receipts, what happens if your house burns down? Before you file away the receipts, take pictures of them and upload them to a web-based digital storage (otherwise known as “the cloud”). This way you can access them from any computer connected to the internet. Tech Talker’s episode An Introduction to The Cloud has more info on how to back up your data quickly, easily, and automatically.
For jewelry, antiques, and collectibles, a receipt may simply not be enough. You will likely need to take these items to professionals to be appraised. This will give you a current market amount that your items are worth. If it’s been a few years since your items were appraised, you will want to have it done again. The value of jewelry has changed dramatically in the last few years with the increase in gold and silver prices. Antiques and collectible values can change as well, so if you want to prove the real value of your pieces, make sure their appraisals are fairly current. Then, to keep the appraisal documentation safe, make sure they are in a fire proof safe, or even better, a safe deposit box at a bank. That way, no matter what happens to your home, you will be able to get to this documentation in a pinch.
Tip #3: Get the Right Coverage
Now that you have everything documented, it’s time for a sit-down talk with your insurance agent. In this meeting, present all the documentation that you have so your agent can make sure that your policies will cover the value of the items you own. If you got your insurance policy years ago as a newlywed who just moved into your first home, you likely have accumulated a number of electronics and other high value items over the years. Make sure that your insurance policy reflects that.
Also, some items have limits that the insurance company will reimburse. Most basic homeowners and renters policies will only reimburse $1,000 or $2,500 for jewelry. For many people, that doesn’t even cover their wedding rings. Once you have your appraisals from a jeweler, you can then request a rider policy to be added to your homeowners and renters insurance. A rider is a policy that specifically names high value items that you have disclosed to your agent. Without it, you could be out thousands in the event of a crisis, so take the extra time to make sure that all your valuable items are covered.
While we all hope that we’re never hit by a natural or man-made disaster, a little preparation can go a long way to protect your belongings. Take a weekend and get everything documented. It’s a little investment of time that can have a major payoff in the case of a disaster.
Have a question about anything in this episode? Or a suggestion for a future podcast? Send me an email at DomesticCEO@quickanddirtytips.com.
Until next time, I’m the Domestic CEO, helping you love your home.