Most home and business owners will lose money unnecessarily If ADVERSITY or DISASTER strikes. They are just not adequately prepared. Turn on the news to reports of Hurricanes, Fires, Tornados, Floods, Earthquakes and more. You see reports of Burglaries every day. Of course these always happen to someone else, so most of you need not worry. And if a major disaster occurs in your neighborhood and specifically to your house, you are covered by insurance so no need to worry. Or is there?
There is a RISK that could cost you tens or even hundreds of thousands of dollars because you could not itemize what you actually had in your home or business and what the contents were worth. Here are some tips which will help you secure all that you should in most situations:
- Be prepared to prove what you lost. Know what your insurance policy says about the claims process. Following are the specific words in a homeowner’s policy with a high-end company. “Duties after Loss,” The property owner is required to “Prepare an inventory of damaged personal property showing the quantity, description and amount of loss. Attach all bills, receipts and related documents that justify the figures in the inventory.”
- Properly assess your situation. Here is one experiment worth doing. Take your spouse or business associate to a cabinet or storage unit and ask them to name everything in it. Not surprisingly, most people will not get it right. Now consider all of the drawers, cabinets, equipment etc. you own, plus what may be in boxes in storage areas and you can be sure too much will not be accounted for, especially after a life changing crisis.When a major loss occurs, people face a daunting task to recover their lives and possessions. Many of you know a relative or friend who has faced this situation. Many of you told yourselves you were going to at least take pictures of your valuable possessions for peace of mind, if nothing else. And then you never get around to it. The bottom line is that there is substantial money involved, many thousands if not hundreds of thousands of dollars, which could be unnecessarily lost by a home or business owner in an insurance claim.An excerpt from a recent 2013 tax tip from the Internal Revenue Service (IRS) clearly recommends you “Backup Records Electronically and Document Valuables” – “take pictures or video the contents of your home or place of business. Publication 584 can help you determine your loss if a disaster strikes.”
- At the minimum, take videos and pictures of your property and possessions. Remember, the exteriors, landscaping and architectural features are important too. Take the time to get organized and produce comprehensive records. If you don’t have time, get someone to do it for you.Insurance agent Ryan Tendall with the Medalist Insurance Group in Herndon, VA says, “Homeowners and business owners need to think about creating inventories of their possessions. The more supporting documentation you have, the better the chance of a claim process going much smoother and quicker”. To make matters worse, homeowners and business owners cannot prove what many of your most valuable items are worth.Establishing “VALUE” is a critical issue and an absolute requirement.
- Create complete records of value. Assess the existence and completeness of any records you have to establish the value of your possessions. Where are your receipts? Do you have current appraisals for specific expensive items like jewelry, artwork, antiques, special collections, etc? Some items get more valuable over time. How can you take steps to start creating records of value?The benefits of video inventories and proof of value are not solely focused on the insurance claims process. Other areas that benefit greatly include Real Estate Sales, Estate Planning, Divorce Settlements, Home Rentals, Relocation / Moving and Storage and Police Reports associated with Theft. Margie Halem, a top producing Long and Foster Real Estate Agent in Maryland said, “This is absolutely an essential service for my clients”. There is no question about the importance of documenting valuables.”
- Continue to maintain and update your records. Develop an ongoing system to include your new acquisitions and periodic updates to your assessments of $$ value. Keep multiple copies in different places and be sure these records are safely stored and protected. If you are at risk in any or all areas mentioned above, you should consider taking action to do something about it. Disasters and legal issues don’t wait until you are completely ready for them. For very little time and expense, you can do a lot to protect your possessions and your money.
- Do it yourself or get a professional to do it for you – but DO IT! A professional can do the comprehensive job necessary to create the inventory and records of value that will stand up to the test when they are needed. The money you will spend to get this done is miniscule compared to the value of what you could lose. Don’t just let anyone into your home or business. Be sure any company or person is covered by liability insurance and bonded to cover any injuries, breakage and other possible wrongdoing.
Taking action is relatively easy, will provide you with some assurance and peace of mind and will help you reduce the risk of financial loss. Do it now!
Betsy and Errol Unikel are co-owners of Home Contents Videos LLC and BusinessVideoInventory.com. Both are former executives with small and large firms. They can be reached at firstname.lastname@example.org, email@example.com