Homeowners Insurance: Taking a Home Inventory

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Chris Tepedino is a feature writer that has written extensively about auto insurance for numerous websites. He has a college degree in communication from the University of Tennessee and has experience reporting, researching investigative pieces, and crafting detailed, data-driven features. His works have been featured on CB Blog Nation, Flow Words, Healing Law, WIBW Kansas, and Cinncinati.com. ...

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Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Reviewed by Rachael Brennan
Licensed Insurance Agent

UPDATED: Jul 19, 2021

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Many homeowners – especially first time homeowners – might make the mistake of thinking that a home inventory isn’t that important. But this belief couldn’t be further from the truth. Without an accurate and thorough home inventory, you could run the risk of purchasing either too much or too little coverage for your personal belongings. As we’ll discuss below, purchasing the wrong amount of coverage could be an expensive mistake.

Purchasing Too Little Coverage

Purchasing too little personal property coverage usually happens as the result of a homeowner not taking the home inventory process very seriously. Others may purchase less than the recommended amount on purpose in order to save money on their yearly premium. However, regardless of your motives for purchasing less coverage, this could eventually be an expensive mistake.

Personal Property Coverage Premiums

50% Personal Property Coverage
75% Personal Property Coverage

New Jersey
North Carolina









The chart above uses a $250,000 home as an example. In one scenario, the personal property coverage is estimated at 50%. In the other example, the coverage is set higher at 75%. Over the life of such a home, the difference in annual premium costs can result in the savings that you see above.

Purchasing less than adequate coverage can yield some moderate savings over time. However, if you need to file a claim in order to have your personal property replaced or repaired, those savings can vanish quickly. Between your deductible and the fact that your insurance company will likely raise your premiums as a result of having to pay out a claim, any savings you get from lowering your personal property coverage can be wiped out just as fast as your property was destroyed.

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Purchasing Too Much Coverage

Then again, purchasing too much coverage could be equally disastrous. From the chart above, you can get an idea of how much you might spend for personal property coverage over the life of your home. Assuming you never need to file a claim on your personal belongings, your insurer gets to pocket that money as profit.

How to Take a Home Inventory

You’re basically free to take your home inventory in whatever way you wish. However, you should make sure your inventory is as detailed as possible. Here are a few suggestions you should follow in order to build a thorough and complete home inventory:

  • The devil is in the details. Gather as much proof as you can in order to accurately demonstrate the worth of your possessions. Gathering receipts, writing down serial numbers, and taking pictures are all great methods for documenting the true worth of your personal belongings.
  • Document however you want. Whether you go analogue or digital, make sure you document your home inventory in a way that is fast and easy for you to do. If pen and paper and polaroids feel more appropriate, then go ahead and take your home inventory that way. If you’re more tech savvy, you can take a digital approach with cloud-stored digital photos, an electronic spreadsheet, and scanning all of your receipts. You can even download home inventory apps to your phone which help you do all the hard work.
  • Keep your inventory up to date. Many people make purchases throughout the years that they might not think about adding to their home inventory. That’s why it’s best to update your inventory every year. Set a date, put it on your calendar, and make sure you update it on a regular basis.

For more information about homeowners insurance and personal property coverage, feel free to take a look at these other resources:

Homeowners Insurance 101

Types of Homeowners Insurance Coverage

Deciding How Much Coverage You Need

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