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Put this on top of your "to do" list: a home inventory. Most people don't have one, and when a disaster strikes they won't get their money's worth from the insurance company.

Hurricanes, earthquakes, tornadoes, floods, fires: Disaster strikes all the time. But until it hits close to home – literally – most people assume it could never happen to them.

Sure, most of us have insurance. But how many have a full home inventory? Without one, if you lose it all, without a photographic memory it’s highly unlikely you’ll remember everything you own. Which means you won’t get your due from your insurance company.

You’d think that since that’s the case, everyone with insurance would have an inventory. But you’d be wrong.

Property loss consultant Rich Connette says he’s never met a homeowner who knew exactly what they owned – not in 17 years on the job. In the video below you’ll see dramatic evidence of why a home inventory is important and hear more from Connette and Money Talks News founder Stacy Johnson about taking stock of your possessions. More details on the other side.

As the video said, if you don’t track everything down to your last sock, you won’t be getting your money’s worth from the insurance company. Do you really want to line their pockets more than you have to? Here’s how to create an inventory of your home:

Pick your software and storage methods.

There are a lot of free options out there. Here’s a customizable home inventory spreadsheet that you can use with Microsoft Excel, OpenOffice, or Google Docs. The Insurance Information Institute also offers a free, guided home inventory where you can store your information and up to 1 GB in photos online. What You Own is a free standalone program highly recommended by CNET for its clean interface and ease of use. These latter two options let you link photos and receipts to items, which may be easier than saving them in folders with your spreadsheet, but do what works for you. Even scribbling on a napkin or taking a few snapshots is better than nothing.

Whatever your solution, remember you can’t just store it on your computer’s hard drive – that may get destroyed in a disaster. You can print copies or copy them to a digital storage device and stow them in a fireproof safe or in a safe deposit box, or swap lists with family and friends. Or you can save your information online and access it anywhere – email it to yourself as an attachment or use Google Docs. Amazon.com also offers 5 GB of free space with its Cloud Drive service.

Do one room at a time.

Start your list in one place; it’s easy to accidentally skip over things if you go category by category (electronics, furniture, etc.) Write down the name of every object you own, although you can group items of the same kind where it would be particularly tedious to list them individually (like kitchen utensils or books). Make notes on condition, model, and estimated value. Keep receipts if you have them.

Take photos and video.

Use a digital camera to photograph your property as another way to document its condition. (Don’t forget to list the camera, too.) If you have a video camera, you can also walk around filming stuff while narrating what it is and what it’s worth. Remember to open closets and drawers to show everything, and consider dividing the recordings up by room.

Don’t forget important paperwork.

While paper isn’t especially valuable, it can definitely be important: Replacing records, financial and legal documents, and identification can be a major hassle. Read our story How to Replace Lost, Stolen, or Destroyed Personal Paperwork for advice on preserving or recovering this stuff.

List valuables separately.

Big-ticket items like jewelry, collectibles, and high-end electronics may require separate insurance and you may want a separate section on the list for them. If you’re especially thorough anywhere, it should be here – try to include make, model, serial number, purchase date, and location, and multiple photographs. Rule of thumb? The more you paid, the more you document.

Once your inventory is squared away, check out The 5 Golden Rules of Saving on Insurance and Should You Have Umbrella Insurance? to make sure you have the coverage you need at the right price. And don’t forget our handy insurance search.

Stacy Johnson

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