Home Inventories

You probably have insurance for your house/apartment/condo and your furniture and stuff inside it.  (If you don't - get it!  I'm no fan of insurance companies, but I simply could not afford to lose everything in a fire.)

So, great, you have insurance in place.  Do you feel secure?  You shouldn't.  Do you know what happens when your house is destroyed by fire?  Sure, your house will get rebuilt.  But what about your stuff?

Let's say that you have insurance for the contents of your house in the amount of $100,000.  That does NOT mean that the insurance company will write you a cheque for $100,000 to re?furnish your house and buy new stuff. It means that you will get up to $100,000 if you can prove to the insurance company that it will cost you $100,000 to replace your stuff.  That's right:  YOU have to prove to them what you had.  That's a hard task, given that any receipts that you had burned up with the house!

What does that mean?  Well, you have to be able to accurately list what you had in your house.

There are companies that make a business of helping policy holders recover as much as possible from their insurance companies.  They usually take a percentage of whatever you recover.  Do you really want to give that money away?

Here's a project for you: Go through your house, one room at a time, and make a list of the things that are in it.  (There are many computer programs that will help you do this, and even categorise the goods and tabulate the values that you put in.)  List everything!  Be detailed where necessary.  (Don't put "TV": put "35" JVC hifi stereo PIP two tuner TV".)  Don't list what you paid for it: if you bought it on sale, that price will not reflect

the price you will have to pay to replace it.  You won't be able to restock your house by waiting for sales.

Your policy probably has replacement cost coverage. It doesn't matter if it isn't worth much now because it is used.  What matters is how much it will cost to replace.

Take, for example, the clothes in your closet.  How much would it cost to buy all new shirts, ties, suits, jeans, shoes, t?shirts, sweaters, belts, etc.  Probably several thousand dollars, maybe even over $10,000 just for you, not including your spouse.

After you go through your whole house, see what the totals are.  If your total is $200,000 and you only have coverage for $100,000, hurry up and buy more insurance.  Check your policy.  If you find that you have, say, $10,000 in jewellery and your policy only covers up to $5,000, get extra coverage.

I hate paying even more for insurance, but in my practice, I have seen more than one family lose their entire home and all the contents and found themselves with inadequate contents coverage.  As a result, years of acquiring nice things for the home went up in smoke and they had a choice:  either furnish the whole house with lower?quality goods than they had before or only replace some of their goods and make do without the rest.

Finally, when you have compiled your list, make a copy of it and store it somewhere else (office, in?laws).  Revise your list every year after Christmas (that's when you have likely acquired the most new goods at one time).

Take stock: it's worth it.