Protect Personal and Business Assets
by Taking an Inventory
By Karen Backus
With fresh battle scars from the hurricanes that hit the Southeastern US in 2004, we are now dealing with a broader disaster from the effects of Hurricane Katrina. With over 90,000 square miles of devastated land mass it should be a wake up call to each of us, just how destructive, quickly and effectively Mother Nature can disrupt our lives.
While many of us will dig deep into our hearts and pockets to find ways to help these victims, we also need to heed the call and take additional steps to protect ourselves and our loved ones. While many of us think of hurricanes as a destructive force with massive flooding that hits the coastlines, the fact of the matter is they also produce destruction by other means such as tornadoes, hail damage, and severe lightening strikes that can create fires, or cause surges throughout the electrical systems of a business or home.
As part of the culture of coastline living it has always been understood that in the event of a major storm individuals may from time to time be asked to remove themselves from threatened areas of these storms. Because of the need for victims to move further inland regions to find living arrangements and employment needs, it has also created strains on local, city, state governments whose budgets had not planned for sudden influx of new residents.
In the days that have followed Katrina, victims have been asked to fill out tons of paperwork to register them for benefits. In addition residents will be contacting their insurance agents to start the process of claiming benefits from their policies in order to have check issued for their personal content.
But as the client, will you be able to provide a detail list of your content? Do you have the necessary contact information with your policy numbers in order to contact out of region offices to expedite your insurance claims? By taking inventories of your home, business, and personal information and burning this information to CDs or DVDs, you have now taken the guesswork what it is that you and your family had as content!
Reasons to Take an Inventory and Content to Consider
- Insurance adjustors will ask you the insured, to provide them a detailed list of your losses!
- In processing claims, insurers have a window of time to make corrections to their claims. Any items submitted after this window is normally not paid and the home owner has just taken a loss.
- Pictures validate condition of your personal content.
- Pictures can provide a clearer interpretation compared to a handwritten list.
- Many policies are written for replacement cost rather than fair market value. If an item is obsolete, pictures and descriptions of features provide the adjustors with details to try to match an appropriate replacement.
- Once an inventory is complete, you need to review with your agent to see if you have enough coverage. If you have too little insurance, you the insured will be forced to take a loss.
- Do you understand the limited liability coverage within your insurance policy? This area of your policy differs greatly from one insurance company to another.
- If you run a home based business are you sure your homeowner's policy will cover your business should you take a loss?
- Hobbies - are you sure your homeowner's policy covers your tools and supplies? Woodworking shops with a great number of tools are an example which may require additional insurance.
- Gun Collectors - the limited liability area of your policy may have set restrictions.
- Jewelry/coins - most policies have a limit before riders are required.
- Stock, bonds, CD's - have you recorded the serial numbers and do you understand how your insurance policy covers these items.
- Antiques and collections - appraisals should be on file with your riders. Any updates also should be placed with your riders.
- Features of the house are best reviewed with pictures. Special floors, moldings, upgrades of appliances, window treatments, etc.
- Transitions or so called "life events" are often accompanied by large changes in home content. Events such as the birth of a baby, children going to college, stepping up in live style, stepping down in life style often get overlooked. Changes to renter/landlord relationships, pre-nuptial agreements, and divorce decrees are all good times time think about your inventory. Including an inventory as part of a will can provide a clearer picture for executors to carry out the wishes of the deceased.
- To recover from fire, theft, natural disasters.
- Computer equipment may only be a few hundreds of dollars in value; software may be several thousand dollars in value.
- Be aware of "money pits!" Area's within your home that collects assets and total large sums of money. Examples include home entertainment centers, storage sheds, basements, workshops, etc.
- Moving, adding or removing items from storage, boats, RVs, second homes or vacation property should not be forgotten in your inventory.
- Don't forget to document seasonal items that are only used one or twice a year. Example: Christmas decorations!
But just taking an inventory and storing it in an off site location is not enough. If you suffered a loss, as insurance claims are processed and checks are issued, now is the time to start a new inventory list of items that are being purchased to set up homes as victims try to move forward. New inventories which now list the purchase prices of these replacements allow individuals to maintain a running total of their content and offer the insurance agent an assessment of what that content is worth. Agents now have the means to offer better coverage for their clients.
Furthermore, inventories need to be updated periodically. Schedule updates between the end of the holiday season and tax time, for the following reasons. Generally during the holidays many families exchange gifts which bring new items into the residence. Second, seasonal items such as decorations are generally on display which makes documenting them easier if this is done while packing up for the next season. Third, as families are looking for tax deductions, items are frequently donated, thus these items need to be removed from the home inventory list.
Burn all of the above information to media such as CDs or DVDs. In addition, take the time to collect important contact information with policy numbers of your insurance, doctors, medical history, important papers, prescriptions drug numbers, and yes even an updated resume. By burning this information to CD or DVD media, this information has now become compact for storage to a location outside of the home. Whether it is in a safe deposit box or with another family member, the key is to have it outside of the home some place where it can be retrieved in case of emergency.
Have a recovery plan. Can you retrieve this information easily and take it with you if it becomes necessary to move out of your current area? Help you and your family by taking preventive steps in recovering your assets. By taking an inventory you have taken the first steps to shorten your role as a victim and the first step to surviving these events!
Karen Backus is the owner of Backus Alternatives, a provider of inventory services for small businesses and homeowners. Visit her website at www.backusalternatives.com.