In the midst of a near-record home buying and home improvement spree, many new and existing homeowners are missing an important tool for filing an insurance claim: an up-to-date home inventory. Only four in 10 homeowners currently have a home inventory, a recent Insurance Information Institute (III) survey shows. Fortunately, new ways of creating an inventory can make the task easier.

Key Takeaways

  • A home inventory can document the value of a your home's contents in case you ever need to file an insurance claim.
  • If you made home improvements or major purchases during the pandemic, now is a good time to create or update a home inventory.
  • New apps and other tools make the job of creating a home inventory easier.

How a Home Inventory Can Help

Not only does an up-to-date home inventory help speed insurance-claims loss settlements, it also documents for tax purposes losses that insurance doesn't reimburse and can help ensure you have adequate insurance coverage for what you own, says Loretta Worters, the III's vice president of media relations. III data shows that about one in 20 insured homes has a claim each year.

"Like a lot of things we need to do, people are procrastinators by nature—whether it's because of fear or perfectionism or just being overwhelmed with the task," Worters says. "People know it's a good idea, they understand that it will make their lives easier if they have to file a claim, yet they don’t find the time to do it."

Indeed, in the III’s latest Triple-I Consumer Poll, only 43% of homeowners said they have an inventory to help document losses for their insurer, such as a written list, photos, or video accessible by a smartphone or other device. That percentage is well below the high of 61% reported in 2012 according to the III.

Pandemic Trends Highlight Need for Up-to-Date Information

Moreover, a pair of pandemic-driven housing trends make an accurate inventory more essential today, experts suggest.

Due in part to the pandemic, the ranks of U.S. homeowners grew by 2.1 million by the end of 2020 (matched only by the pace of home buying during the housing boom of 2003-2004), according to a recent Pew Research Center analysis of U.S. Census Bureau Housing Inventory Estimates.

At the same time, spending on home improvements surged to nearly $420 billion in 2020, as Americans modified their living spaces for remote work, learning, and leisure in response to the stay-at-home trend, according to the Joint Center for Housing Studies of Harvard University. This uptick in home remodeling is expected to continue throughout this year and into 2022, says Chris Herbert, the center’s managing director.

"With a financial boost from recent federal stimulus payments and strong house price appreciation," he says, "homeowners are continuing to invest in the upkeep and improvement of their homes." That could mean "even greater investments in their homes this year," he adds.

All that spending is a good reason to create or update a home inventory, says III’s Worters.

"Particularly during this time, people have been redoing their homes, buying office furniture and computers," she says. "There's more 'stuff,' so you need to make sure those new things are included."

How to Make Your Own Home Inventory

A home inventory is basically a list of your personal possessions along with their estimated financial value. The III offers advice on how to start creating a home inventory, and you can opt for a low-tech method (making a written list and filing receipts) or a higher-tech approach (using an app to record your items and their worth).

You can also check the website of your homeowners insurance carrier, as it may offer a home inventory worksheet or app for your use.

Whatever method you choose, here are some tips:

  • Take it room by room. Focusing on one room at a time can make the task less overwhelming and also help direct your attention to specific items of value. (Don’t forget to include outdoor items, too, like patio furniture.)
  • Take photos or videos. And include model and serial numbers where possible. Visual records will help refresh your memory and can be useful back-up when filing a claim.
  • Try an app. The National Association of Insurance Commissioners launched a new home inventory app in April that can group belongings by category, scan barcodes, and upload photos, among other features. It can be found at the App Store and Google Play.
  • Keep receipts and proof of ownership. That's especially important for big-ticket items.
  • Review and update your inventory. Try to do it either annually or whenever you make a significant purchase or home improvement.
  • Keep it in a safe place. In case of a serious fire or other disaster, it's best to keep a copy of your inventory outside your home. A backup external drive in the safekeeping of a relative, a secured storage site online, or a safe deposit box at your bank are good options.