February 1, 2019
Five steps to understanding the value of what you own
Do you know the total value of your possessions? You likely have a sense of the major things you own, but the complete picture can prove difficult to discern. If ever a catastrophe or robbery strikes, your home insurance company will ask you to estimate the cumulative worth of your belongings so that you can receive the correct compensation. This can be daunting. Not to worry: take the below steps to compile an accurate estimate.
- Start big, go small
Over time, your home and life has likely become increasingly cluttered with possessions. When making a list and assigning values, start with the bigger stuff (e.g. house, jewelry, art, etc.). This way you can ease into the process. By the time you get to socks and sundries, you’ll be an expert. As you go, film and photograph everything so you have concrete evidence.
- Consider the variables
Of course, the things you own seldom hold their value. In fact, all will either appreciate or depreciate over time; when doing the math, try to account for this. Also, talk to your insurance broker about the specifics of your policy and whether you will receive payment for a replacement without deduction for depreciation or the item’s value at the time of loss.
- Ask an expert
Chances are, you will not have expert knowledge about all of your effects and what they go for. Feel free to reach out to an expert for specific items. Don’t know what that piece of art you bought a decade ago is valued at? Try an art dealer. And so on.
- Backup your list
When you have a solid account of your things, type it out, back it up, then back it up again. Email it to yourself. Store it in the cloud. Find a safety deposit box. Consider sharing it directly with your insurance company. Furthermore, if you can, keep paper records, tax files, receipts, warranties, government papers, and so on in an offsite location.
- Update as you go
Possessions evolve. You acquire new material goods and some of those gain additional value. Once you know what you have, revisit it every few years to maintain its accuracy. And to streamline the process, keep records and receipts every time you make a new purchase.
So, now you know how to determine the value of what you own. Talk to your insurance provider to ensure you have the right coverage for your situation, and update it as needed.