Preparing a Home Inventory

Protecting your household goods and personal possessions is as important as protecting your home itself. But it is nearly impossible to tell how much you own or what it's all worth unless you make an inventory. Follow these simple steps:

1. Proceed, room by room, listing all personal belongings and their estimated replacement costs.
2. Don't forget closets and storage areas, or special items such as cameras, collections, and valuables that may be stored away. Create a Miscellaneous column on your list for any items that you do not enter in a room category.

Use Photographs or a Video

1. Videotaping or photographing your home (both inside and out) is another way to protect your home and possessions. In the event of a claim, this provides insurance companies with the detailed information necessary to settle your claim quickly and painlessly.
2. Store copies of photos or videos in your safe deposit box, if you have one, or leave them with a family member or a friend for safekeeping.

If Your Policy Pays Replacement Cost on Contents

The Replacement Cost coverage option pays the full cost of replacing your covered personal property (after you meet your deductible).

1. Simply list the estimated replacement value of each item.
2. The replacement value is what it would cost you today to buy the same item new.

If Your Policy Pays Actual Cash Value

To determine the present value of your possessions:

1. Estimate the cost of replacement (what it would cost you today to buy the same item new).
2. Subtract the estimated depreciation, including wear and tear and obsolescence. For estimating purposes only, you might use 10% per year.

Example: Your TV cost $800 and is four years old. Today that same set would cost $1,000. After subtracting the 40% depreciation (10% per year for four years) from the replacement cost ($1,000), the current Actual Cash Value of your TV would be $600.

Please note that because values are constantly changing, you should update your Home Inventory from time to time and whenever you make a significant purchase.

If you have purchased Replacement Cost Coverage, the homeowners policy will pay the full cost of replacing your covered property minus your deductible. Otherwise, your policy will reimburse you for the Actual Cash Value of your possessions. Actual Cash Value is the cost of replacing an item at the time of the loss minus normal depreciation.