Household Inventory

Personal Finance June 13, 2007|Print

Contents

What is a household inventory?

A household inventory is an itemized list of your personal belongings. It provides a method of knowing exactly what personal property you own. An accurate household inventory is a necessity whether you are a homeowner or a renter.

Why take an inventory?

It gives a record of your personal belongings for insurance purposes, an approximation of the value of items owned to determine needed insurance coverage and for use in your personal net worth statement, and it is useful in planning replacements of furnishings and equipment. The inventory can also be used when planning the distribution of your estate. In case of a loss due to burglary, vandalism, or an insured peril, your insurance company requires a listing of all items lost or destroyed. To reconstruct a list of belongings from memory is often difficult because it is easy to overlook items hidden away, as well as those you use on a regular basis.

The initial investment of time and frustration in preparing the inventory may seem significant, but once completed the inventory will be useful for a long time with regular updating. As new items are obtained or others discarded, change your inventory accordingly.

Where do you store the household inventory?

  • Keep one copy of your household inventory away from the insured dwelling, as in a safe-deposit box.
  • Keep a working copy in the home file.

Remember to keep all copies up-to-date and compare them on a semi-annual basis.

What methods can be used to complete the inventory?

To jumpstart the task, photograph or videotape all walls in your home that have home furnishings. If using a video with an audio recorder or a tape recorder, you can verbally describe the contents as you go room by room. Photograph open closets, cabinets, cupboards, and drawers. For insurance purposes, take close-ups of unique or expensive items to document their existence and condition. Date the photographs and use them to show all furniture, furnishings, accessories, and other items—large and small—in the room.

image of photographer

Gather your product manuals and use them to list furnishing or equipment details on your written inventory or make a computer file of this information that can be easily updated. Photographs should be kept with the household inventory in a location away from the premises.

Small items to inventory include:

  • Silverware
  • Linens
  • Clothing
  • Jewelry
  • Small electric appliances
  • Tools
  • Office equipment
  • Recreation equipment
  • Items normally stored in the garage, basement, or out-buildings

Also include any personal items owned by family members but not always stored at home, such as tennis rackets stored in school lockers.

When taking the inventory, use the Household Inventory Interactive Form. Place sheets from the form in a notebook with separate pages for each room. Leave space on each page to add new acquisitions. Annually update the inventory by making needed changes and deleting discarded items.

What information should be included?

When listing items include the original cost, the date purchased, any alterations or repairs done on the item, and the corresponding cost, especially if that repair or alteration made the item appreciate in value. The cost should only include the charge for the item, not finance or shipping charges, since these charges are not reflected in the worth of the item.

Inventories can include the current cash value of the item. This is useful in determining your net worth or the amount of insurance coverage needed on personal property. The current value of the item is an estimate of what the item is currently worth to others (not you). An estimate of worth could be computed by dividing the original cost of the item by its expected useful life and deducting that amount for each year of use.

When describing your furnishings and equipment, be as specific as possible. Write an accurate description of larger items. For furniture, include the color, wood type, and size. For appliances, record the manufacturer, model, serial number, and size.

What about antiques, art and collectables?

Any items that are worth more than they appear, such as antiques or original works of art, should be given special consideration. Get an expert’s appraisal to determine their worth. These items could be covered by a “floater” or “rider” to a property insurance policy. This will cover the actual worth of the item. “Floaters” or “riders” on an insurance policy add a nominal premium cost, but should be considered for insurance coverage of valuable items.

Making the inventory

When describing your furnishings and equipment be as specific as possible. Write an accurate description of large items. For furniture, include the color, wood type, and size. For appliances, record the manufacturer, model, serial number, and size.

Your inventory can be placed in a binder or folder. Use separate pages for each room. Leave space on each page to add new acquisitions. Make needed changes and delete discarded items.

If you would like to enter data into the form on the computer, use the Household Inventory Interactive Form, and save it on your computer hard drive.