Determining the Proper Amount of Insurance Coverage for your Personal Property

Are the contents of your home or business properly ensured? There's really only one way to know with any degree of certainty: perform an asset inventory. Collectors, in order to obtain insurance riders, are required to itemize each of their collectible items, recording any identifying information as well as taking a photo and substantiating value. But beyond that, the majority of us have not performed an asset inventory. So we don't really know if we're properly insured. Have we accounted for our clothes, CD's/DVD's, software programs, toys, etc. – items typically forgotten in the insurance estimate? An asset inventory is not difficult to perform. Start with a list of all of your belongings by room. Then walk from room to room, recording the brand, model, serial number, original purchase date and purchase price for each item. Take a photo while you're obtaining the above info. Spend a few minutes and gather any receipts that you have that can accompany your inventory information. When you've documented everything, calculate the total value of your belongings and compare this information to the current value of your insurance policy. At this point, it's also a good idea to determine if your insurance policy covers replacement cost or actual cash value. Depending on your individual situation, you may opt for one type of coverage over the other. Remember, in the event of a claim, your insurance company will want the information noted above anyway. So by completing your inventory for insurance evaluation purposes, you'll also be arming yourself with the information required to expedite a claim, should you need to file one. And beyond those two uses, a completed inventory can be used for many other purposes (for both personal and business reasons): estate planning, divorce proceedings, loss substantiation, depreciation schedules, loan collateral report, etc. So, don't delay. With the average premium for homeowners insurance in the US looming just under $900, now is the time to complete your asset inventory and to determine if you are properly insured.