Why You Need a Home Inventory

by Rick Kahler

Are you getting enough protection from your homeowners insurance? If you don’t have a home inventory, then maybe not. Find out why you need a detailed list of all your belongings and how often you should update it.

In my experience, the number-one reason people engage a financial planner is to sleep better at night. That doesn’t mean planners give advice on what kind of mattress to buy. The sleep aids we provide are more about peace of mind.

For example, you may be sleeping just fine, thank you, because your home and contents are covered by homeowners insurance. A planner might disturb your sleep by helping you look at whether you’re getting the most protection from that insurance.

The first is having a detailed listing of all your home’s contents, along with proofs of purchase and serial numbers. If a fire or flood destroys some possessions, the insurance company will need a detailed list of everything that was lost.

You have that list, right? It’s safely stored in a secure location other than your home, correct? And you update it annually? Congratulations, you are one of the .01% of homeowners that do!

Now, let’s be serious. There is a high probability you don’t do this and you are not losing sleep over it. Last time you checked, the amount of insurance to cover your home’s contents seemed so high you could replace everything in your house and have enough left over to furnish your neighbor’s place.

While you may be right about that, you could be terribly wrong. Do you know for sure?

Maybe, if you don’t have expensive artwork or jewelry, you assume your ordinary belongings wouldn’t be that expensive to replace. This isn’t necessarily the case. If your refrigerator or washer and dryer are old enough to vote, you might be shocked at what it would cost to buy new ones today. Or think about what you might spend if you had to replace all the tools in your garage at once. How can you know the true cost of replacing all the contents in your home and that your insurance is high enough to replace them? You can by having an inventory of them and a reasonable idea of their current replacement cost.

If updating the contents portion of your insurance and making a video inventory don’t help you sleep better, maybe the problem really is your mattress. My advice is to do some research through Consumer Reports before you buy a new one and be sure you add it to your home-contents video.

• Taking Inventory of Your Possessions in Case of Life
• 18 Affordable Anti-Theft Tips to Keep Burglars Out of Your Home
• Homeowners Insurance Basics Every Homeowner Should Know
• Homeowners Insurance When You Downsize

Reviewed May 2021

About the Author

Rick Kahler, MSFP, ChFC, CFP, is a fee-only financial planner and author. Find more information at KahlerFinancial.com. Contact him at Rick@KahlerFinancial.com or 343-1400, ext. 111.