Documenting your possessions

Whether you have a prized collection or just a few trinkets that add up to a chunk of pocket change, they’re probably covered by your insurance. It may be just your regular homeowner’s insurance policy, or perhaps you have a special policy for your home office or a particular set of valuables. Whatever the coverage, you need to have iron-clad proof of your possessions and their value in order to make a claim on that policy and ensure that you’re reimbursed for the highest possible amount.

Your first step in documenting your possessions should be to pull out that insurance policy and see if it has specific requirements for documentation. You may need to prove the purchase price or the market value of the item. If the former, you need to find a system of documenting receipts. If the latter, a formal appraisal may be in order.

Next, make a list of the valuables that you want to protect. This may take some thought, as you may have more items than you realize. Think about:

• Collectibles
• Equipment and appliances
• Jewelry
• Furniture and antiques
• Books and reference materials
• DVDs and CDs
• Computers and electronics
• Entertainment center components

Don’t forget items like lawn mowers, vacuum cleaners, and other items that are easily overlooked but expensive to replace.

Once you have a list, it’s time to begin collecting the documentation that is required by your insurance policy. If you don’t have the original receipts, see if you can access your method of payment. While the hard-copy bank statement or credit card bill may be long gone, see if your financial institution offers statements online, or email the company to see if you can get a copy of your statement. If that fails, look for the item online and, if possible, print out current pricing from a few merchants to at least establish a baseline for its value.

Visual evidence is important, too. Grab your digital camera and take photos of every item on the list. Print out the photographs and put them in a plastic binder with a folder for each item, or create electronic files on your computer. If you choose to go the paper route, be sure to make a copy of the binder and put it somewhere safe off-site, such as a bank safe deposit box or with a trusted friend or relative. That way, in case of fire or other disaster, you still have a full set of documentation. If you decide to keep electronic files, be sure that you back up your files.

Another good tool for documenting your possessions is your camcorder. Walk through the house with your camera rolling and provide commentary on the items, their value, and any other relevant information. You can also film receipts and other documentation of value, like appraisals. Then, store the electronic file--again, with a backup mechanism--on your hard drive or in a safe-deposit box. (While you’re at the safe-deposit box, you might want to put your valuable documents--birth certificates, stock certificates, backup CDs with photos stored, marriage license, Social Security cards and other important papers--in there for safekeeping.)

If you find that the value of your items exceeds the amount that your insurance policy allows, contact your agent to adjust your coverage. It’s a good idea to do that every year or two. In addition, you should review your documentation at least once a year, or as you acquire more items or something happens to increase their value. Update photos or your video recording along that timeline, as well.