Why you need a home inventory
Would you be able to list all the contents of your home if you had to? Most people could not, which is why it's a good idea to put together a written home inventory. The Minnesota Society of CPAs (MNCPA) explains why this is a smart step and offers tips on how to do it.
Three important uses
A home inventory can help you determine what needs to be replaced if you are the victim of a burglary or a fire or other disaster. There are three key reasons that the inventory will come in handy. First, having a full catalog of your home contents should help you get a speedier reimbursement from your insurance company. It will also make it easier to identify any losses you might want to claim for income tax purposes. In addition, before any problems occur, the inventory will give you a realistic sense of what you have and help you decide how much insurance you need.
How to get started
An inventory is simply a list of what's in your home, including a short description of each item. When you're putting it together, you should collect any information you have on the items in your home, including your purchase receipts and any appraisals that have been done. Organize the inventory by room, listing everything that's in each location before going on to the next.
Don't forget pictures
While a written inventory is important, it's also a good idea to take photographs of every room that will help back up the information in your inventory. Take several pictures of each room so that all the items are easy to see. Then attach these pictures to the related list in your written inventory. If possible, make a video of your home, walking slowly through each room and describing what's being shown on camera.
Focus on the valuables
Even the smallest or least costly items will add up if you have to replace them after a theft or disaster, so be sure to get everything. For clothing, it may be easiest simply to count all your shirts, pants, dresses, shoes and other kinds of apparel, rather than listing each item. The same is true of china, silverware and linen. Remember, though, to pay special attention to the most valuable things, including jewelry, art, antiques and electronics. Be sure to include as much information as you can about them in your inventory and take pictures of each one. You should also contact your insurance agent about these items because some of them may need added coverage depending on their type and value.
Keep it safe
Of course, it's important to safeguard your inventory so that it isn't destroyed by any disasters that damage your home. Either store it in a safe deposit box or ask a trusted family member or friend to hold on to it for you. (It might be best to choose someone who does not live in your area, so that their home is not struck by any local natural disaster that affects you, too.) You might also email the inventory to yourself and a friend so that you can download the file when you need it.
Turn to your CPA
Remember to consult your local CPA with any questions about your family's finances, including whether your insurance coverage is adequate and how best to protect yourself from risk. Your CPA has the expertise to answer your most important financial questions.
Information and resources are available to the public on the MNCPA Web site at www.mncpa.org/information, including tax and financial planning information for individuals and small businesses. A free CPA referral service is also available on the website or by calling 800-331-4288. The MNCPA is part of the national 360 Degrees of Financial Literacy campaign to help Americans improve financial literacy; information and resources are available at www.mncpa.org/360.