Make a list, check it twice: Home inventories can help in case of natural disaster

Wild weather has become more common with climate change, the experts say, and homeowners can prepare for natural disasters by making home inventories -- detailed lists of household belongings and their approximate value.

Making a home inventory can be easy; there are inexpensive or free services, apps and software.

"The format is not nearly as important as just having some kind of list," says Jeanne Salvatore of the New York-based Insurance Information Institute, a not-for-profit that helps educate the public about insurance.

"Just going around your home with a pen and paper taking notes, or making a video with your smartphone of yourself walking around your home and describing the things around you can make a world of difference when you need to make a claim," she says.

And home inventories aren't just for the rich.

"Regular people, whether they're homeowners or renters, need home inventories way more than the wealthy, because they need the money more," Salvatore says. "People always say they don't have a lot of stuff. But if you add up the cost of your bed, with your mattress, mattress cover, bed frame and maybe a few suits hanging in your closet, some high-tech items or small appliances, and your bike or golf clubs, it easily adds up to thousands of dollars. And you're going to really depend on that money to get up and running again after a disaster."

The industry estimates that less than 40 percent of households have a detailed inventory of their belongings, and that having one may halve the time it takes to process a claim, or even mean the difference between being reimbursed for a loss or not.

Inventories also can help you determine whether you have enough insurance coverage. If you find your insurance doesn't cover everything, a home inventory can facilitate applying for aid or deducting unreimbursed losses from your taxes in the event of a disaster, Salvatore says.

To put together a basic home inventory, just make a list of your belongings and their estimated value and store it in a safe place.

Get in the habit of taking photos and saving receipts when buying valuable items. If you don't have a receipt, a copy of a credit card bill is helpful, as are serial numbers and photos, or even notes about where an item was purchased.

Once you have a list, make two copies: Put one in a safety deposit box or other secure, off-site place, and send the other to a trusted friend in another part of the country.

While software programs are plentiful and free or inexpensive, there are advantages to hiring a home inventory company to get the job done -- and the cost (generally between $500 and $800) can save thousands of dollars in potential losses.

"The benefit of a having an experienced third party do the inventory is there's no dispute of claim. There's so much fraud out there, and having a third party eliminates that burden of proof that it's not fraud," says Carrie Mitchell, founder of the Colorado-based TWS Home Inventory, with offices in New York and Florida.

She started her company after volunteering to help fire victims in Colorado Springs.

Know Your Stuff is a free phone application put out by the Insurance Information Institute, and a wide range of software and services is also available from insurance companies and independent home inventory companies.

While it's helpful to include your insurance policy number and insurance agent's phone number on the list, it isn't necessary to send the list to your insurance company unless you want to be sure you have adequate coverage.

Inventories do take time to put together, but the whole family can get involved. Kids can do their own rooms, for example, photographing their computers, electronic devices, sporting goods and other belongings, Salvatore says.

"Most insurance companies don't require receipts so much as just knowing you had a leather couch, what kind it was and what sort of condition it was in," says Scott Spencer, worldwide appraisal manager for the Warren, New Jersey-based Chubb Personal Insurance company.

Update your home inventory annually, he says: "If you do it at the same time every year it's easy to remember. I usually update mine around my birthday."

The most challenging areas are usually attics, basements, closets and other storage areas where things are stashed in boxes.

"Take a look at your garage and ask yourself what you'd want to claim if it went up in smoke. It might be as simple as detailing and photographing gardening and sporting equipment," says Salvatore.

The most commonly underestimated area is the wardrobe, Spencer says. Most people wear the same few outfits over and over again, but the value of everything in your closet can add up to a lot.

Also, be sure to include sentimental or irreplaceable items, such as art, he says.

"Even if you can't replace that $500 painting on your wall, documenting it will allow you to replace it with another $500 painting, as opposed to a poster," he says. "There are way more things than diamonds that have real value."