FAQs : Malden Home Insurance
Creating A Household Inventory
A household inventory is a complete and detailed written list of all the personal property located in your dwelling, or stored in other structures like garages and tool sheds. Your inventory should include your possessions as well as items owned by individuals who are also insured under your homeowners policy, such as family members, other household residents, and domestic employees. You should prepare an inventory whenever you move into a new dwelling and update it periodically (say once every six months) to keep track of new and discarded items.
Create your very own home inventory by downloading our Personal Organizer Home Inventory Worksheets by clicking the button below.
Why do it?
Total recall of all the contents of any one room is quite an accomplishment for any of us, even at the calmest of moments. Remembering all the contents of your house and garage after a fire, theft, or other calamity is practically impossible. Yet that's what you'll be asked to do when you submit a claim on your homeowners insurance, unless you previously prepared a written inventory of your household possessions and property. Omitting or failing to include an adequate description of an item may prevent you from receiving compensation from your insurance company. Considering that the whole point of buying homeowners insurance is to obtain compensation for financial loss, why bet the farm (or your house and its contents) on your memory, or add to the emotional loss and stress which comes from any type of loss? You'll also find that a detailed inventory helps when filing a police report, or when trying to prove a loss to the Internal Revenue Service.
What should the inventory contain?
Under the terms of your homeowners policy, your claim for damaged or stolen personal property should show the quantity, description, actual cash value (if different from the purchase price), and amount of loss associated with each item. Copies of bills, receipts, and other documents that justify the figures in your claim are also typically requested. It makes sense for your inventory to include that information, as well as the purchase price and purchase date of every item. It's a good idea to note serial numbers for appliances and electrical equipment. Listing the contents of each room and building separately helps organize the inventory and promotes completeness.
Make sure you include all the contents of every room, excluding only the four walls, ceiling, and floor. Include rugs and carpets, wall hangings, curtains, blinds, and draperies. Be descriptive and refer to colors, dimensions, manufacturers, and composite materials whenever you can. Make sure you include component parts and the contents of drawers, shelves, closets, storage boxes, and built-in cabinets. For instance, describe not only the bed but the headboard, mattress, and bedding. Try to identify every item that you would have to box or carry out, if you were to move out of the house or apartment.
For clothing, make sure you give a full description of any expensive items, such as leather or wool coats, boots, suits, or formal wear. If you'd rather not describe every item of clothing, at least list quantities (e.g., six wool sweaters, two pairs of sneakers, two pairs of corduroy trousers), and the family member these items belonged to which in most cases can be associated with the room you are inventorying.
Make sure to include the items stored in your attic, basement, garage, or outbuildings. Sports equipment tends to be expensive and should be described in as much detail as possible. Don't forget tools and outdoor equipment like lawn furniture and barbecue grills.
Just do it and thank us later!
You won't be graded on your inventory for accuracy, completeness, or legibility. If you can't stand the soup-to-nuts approach, at least take the time to jot down any items valued at $50 or more. Since a picture's worth a thousand words, consider taking a photograph or videotape of each room, with separate photos for big-ticket items. If you use a camera, make sure you label each photo with notes about the items shown. If you use a video camera, provide a running commentary describing every item (date of purchase, price, etc.) that comes into view. Hopefully, you'll never have to use your inventory, but if worst comes to worst, and you have to deal with a calamity, you'll be happy you took the time to make a permanent record of all your possessions. Now is the time to inventory.
Where should you store your inventory?
Remember the purpose of the inventory. In the case of a fire or catastrophic event, your inventory will do you no good if it got burned up in the fire, or washed away with the flood. Regardless of whether the inventory is stored on film, video cassette, computer software, a sketchpad or a the back of an envelope, keep a copy of it stored somewhere safe — like a safety deposit box at a bank or at a house of a trusted friend or relative. But don't store your inventories copy at their home if they live next door or just down the street. A strong storm or fire could sweep through your area and do extensive and broad range damage.
How much property coverage do you need?
To determine how much property insurance coverage you need, make an inventory of all your home's contents. Don't forget to include furniture, appliances, jewelry, artwork, and the contents of your closets, cabinets and the toy chest. When possible, list the serial number, date and cost of purchase. Include receipts if possible. An easy way to inventory your possessions is to use a video camera or take photos. When using a video camera, you can talk about the specific items, their cost, and when you bought them. Ideally, you would want enough insurance coverage to replace your possessions if they were destroyed.
Keep a copy of your inventory in a location away from your home, like a safety deposit box, or maybe at a close friend or relative's house. This way, if your home is destroyed, your inventory list will be safe at another location. When you make major purchases, remember to add them to your inventory and check with your insurer--you may need to increase your coverage levels.
Two Methods to Determine Value
Insurance companies use one of two methods to determine the value of property:
Replacement Cost : Pays you the cost of replacing damaged property, with no deduction for depreciation, but with a maximum dollar amount.
Actual Cash Value : Pays you an amount equal to the replacement value of damaged property minus a depreciation allowance.
Unless a policy specifically states that property is covered for its replacement value, coverage is for the lower, actual cash value. Check your policy, or ask your insurance agent or representative if you are not sure what level of coverage you have.
Periodically review your existing coverage
Review your existing homeowners or renters policy to make sure you have enough coverage for all valuable possessions. Periodically review your coverage to make sure it is keeping pace with new purchases and/or gifts you have received.
How Much Should It Cost?
One question insurance customers never fail to ask is, "What's it going to cost me?" The cost of homeowners insurance is influenced by a broad range of market factors:
Rising Construction Costs
Increasing Number of Liability Lawsuits.
Customer's needs, policy choices and habits.
We are dedicated in helping our clients control their insurance costs.
Homeowners insurance is one of the most important investments you'll make. You should keep in mind the difference between market value and replacement value, and make certain your home is insured "to value." In many cases, it costs more to reconstruct a house than the house would bring on the open market. Talk with us to make sure you have the right amount of coverage.
You can take steps to lower the cost of your premiums.
Our companies offer special discounts and credits for such features as fire extinguishers, sprinkler systems, and burglar alarms. These are factors in loss prevention, which ultimately help control insurance costs. You can also lower your home insurance costs can by raising your deductible.
Small claims are expensive for insurance companies to handle.
You can reduce your premiums by as much as 10 percent if you increase your deductible from $250 to $500. Increasing the deductible to $1,000 can lower premiums by almost a third.
In addition, the price you pay is influenced by how you pay. Our companies offer different payment plans, so you can pay your premiums in a way that best fits your lifestyle. Finally, you can save money by placing all your home and auto policies with us because we offer discounts if you have more than one policy with us.
Do I Have Enough Home Insurance?
If your home is completely destroyed, you want to be able to rebuild it to its original condition. This requires having enough insurance to replace your home, which may cost more than its value on the open market. The cost of rebuilding is usually more expensive than new construction, especially if your home was destroyed along with many others in a single neighborhood or town. In the wake of a flood, for example, simple supply and demand can drive the cost of materials and labor up and cause the price of rebuilding to skyrocket.
Our companies will work with you to determine your home's replacement cost. Normally using data from the E.H. Boeckh Company, the U.S. authority on replacement value, the insurance company will consider the construction costs of homes in your area that are of similar size and quality.
Typically, a homeowners policy covers possessions whose total value equals 70 or 75-percent of the homeowners coverage. In simple terms, that translates to $70,000 to $75,000 worth of coverage for your personal possessions if you have $100,000 in coverage on your home.
If you collect art, have valuable jewelry or keep other things of special value, consider expanding your coverage to protect those items.
When the value of the things you own exceeds the 70 to 75-percent coverage included in a typical policy, additional coverage can be critical.
In addition, many policies have sub-limits on specific categories of valuables. If the value of those items exceeds the policy sub-limit, extra coverage is probably in order.
A standard policy will probably insure your possessions at actual cash value, which is the value of an item at the time of a loss. To make sure you can fully replace lost or stolen items, you may want to add an endorsement for replacement cost coverage, which will replace the item with one of similar make and model, regardless of the stolen or damaged item's actual cash value. In many of our companies homeowners policies, replacement coverage is included at no extra cost. Check with us, about your policy, to be sure. Finally, we suggest that you take the time to inventory your possessions.
In the wake of a catastrophe such as a fire, it can be very difficult to create a list of all the things you owned.
Now is the time to walk through your house and make an inventory of your possessions.
One easy way to do this is to videotape the contents of your home.
When you're done, place a copy of the tape in a safe deposit box. Or make a copy of your tape or inventoried documents, and store them at a family members home. Then, if the worst ever does happen, you'll have a record that can help us to help you in the replacement of your possessions.
Have more questions about Malden Home and Homeowners Insurance? Contact Derek Witham Insurance Agency, Inc. (DWIA) today!