How to do a Home Inventory for Insurance

Whether it's a fire or a burglary, stuff happens. However, if your belongings are not properly documented they may not be covered by your insurance. I have a friend who was burglarized and he soon found out that most of his things were not covered.

It is extremely important that you have a home inventory. It is the only way to be fully insured and to quantify your loss in the event of a disaster. Do it today. Even if it's a bad attempt, it is better than nothing and you can improve as you go along. Ask your agent if he needs a copy of your inventory and if he has any specific instructions for you. All Insurance companies are different.

So how do you do an inventory of your stuff? There are 3 main ways: Video, Photos, and Documents.

Video

A video inventory basically involves you walking around your house with a video camera taking video of everything you own. You also need to note serial numbers etc. I find this is probably the easiest method, but make sure it is a good video. Also, I found it difficult to get everything into one cut, so it may take a few tries and or some editing.

Photos

Same thing as a video, but still shot. I like this method because you can take pictures of things like serial numbers and certificates of authenticity. I'm also not very good at video editing.

Documents

All of your important documents, receipts for electronics and jewelry, ownership tittles etc. Scan them and save them together.

Appraisals

Some extremely rare or valuable items are not covered by normal insurance. Sometimes you need to get a certificate of authenticity and appraisal, and specific insurance coverage.

How to Store Inventory

Store your inventory online. I keep mine as a series of emails to myself.

Free Inventory Software

http://www.knowyourstuff.org

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Do I Need Insurance? Insurance Amounts and Types

Money Monday

Types of Insurance

Types of Insurance

Home Owners Insurance (HOI) - insures a property against fire, wind, theft, vandalism etc.
Flood/Hurricane Insurance - insurance home and property agains flood/hurricane damage.
Health Insurance - insures against health care cost
Renters Insurance - insures renter's belongings against fire, theft, damage etc.
Accidental Death and Dismemberment - life insurance if death is unnatural
Disability Insurance - insures against lost income due to disability
Long Term Care Insurance - insures against assisted living and nursing home costs
Auto Insurance - insures you against auto damage or theft and liability for property and injury
Life Insurance - insures you against death
Dental - insures agains dental care costs.
Optical - insures against optical care costs.

Do I Need It?

HOI - if you own a home. I recommend a high deductible to save money on insurance.
Flood/Hurricane Insurance - if you need it then it is probably prohibitively expensive. You would be better off storing your equity in a different place than your home. See "To Pay Extra or Not..." Another option is moving.
Health Insurance - If you are alive. I have a friend who was diagnosed with Lymphoma at 24. If your employer doesn't provide it then get a high deductible plan and supplement it with an accidental policy. See How to Save Money on Insurance.
Renters Insurance - If you rent. It's super cheap and many policies cover accidental damage and loss of electronics (ie phone, iPad, laptop, camera etc). I would probably get a small deductible on this one. Make sure to document all your valuables properly or they will not be covered.
Accidental Death and Dismemberment - Worthless. The conditions upon which you must die for this to pay out are ridiculous. If you really want this coverage, add it to your normal Life Insurance Policy.
Disability Insurance - If you are an income provider and your income is dependent upon you working. According to DisabilityCanHappen.org, just over 1/4 of people will experience a long-term (> 3 months) disability before they retire. Make sure you get Long-Term insurance. Short-Term should be covered by your emergency fund.
Long Term Care Insurance - If you are 55 or older. The sad part is many of us are no longer insurable by that age. You can get it a early as 45, but that's pushing it considering most of these costs would be covered by proper health and disability insurance.
Auto Insurance - If you have or drive a car.
Life Insurance - If you have a spouse, I recommend you have life insurance. If you have children, your children demand you have life insurance. It is your responsibility.
Dental - if it's provided by your employer. It usually doesn't cover more than good price comparisons can save.
Optical - Same as dental.

How Much Do I Need?

Home Owners Insurance (HOI) - enough to rebuild your home.
Flood/Hurricane Insurance - none
Health Insurance - $2 million or unlimited life maximum.
Renters Insurance - enough to repurchase all your stuff.
Accidental Death and Dismemberment - none
Disability Insurance - up to 75% of current monthly income
Long Term Care Insurance - get a policy that covers an acceptable amount of services
Auto Insurance - at least liability coverage of 250/500/250. Glass and comprehensive depends. See "How to Save Money on Insurance."
Life Insurance - 10-15 times annual income or total assets.
Dental - minimal. Two cleanings per year should be covered. Good hygiene prevents most tooth decay.
Optical - minimal. Glasses and contacts prices vary greatly. Just shop around. Your check ups should be covered though.

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Dave Ramsey Epic Fail: Whole Life VS Term Life Insurance

Dave Ramsey Epic Fail

Anyone that listens or follows Dave Ramsey knows that Whole Life Salesman are the "scum of the earth." Pretty harsh words coming from a self described God fearing man. WL salesman are just as likely to be scum as any Financial Planner or Advisor. In fact, they are no more likely to be scum than a loan officer or real estate agent or RADIO HOST at that matter. WL salesmen simply have a different point of view of investing.

So what do you do when the WL salesmen say Dave is ignorant and Dave says they are scum? Simple. Educate yourself and make your own decisions. The #1 thing I don't like about Dave is that he has a "one size fits all" strategy. In reality every person's financial situation is different, and there is no "one size fits all" answer.

Term Life Insurance

• inexpensive
• no cash value
• limited coverage time frame

Whole Life

• tax deferred growth
• tax free withdrawals (if done correctly)
• lenders count CV (cash value) as an asset
• IRS does not count CV as an asset
• CV is protected against law suits and bankruptcy
• expensive at first
• death benefit for life
• CV can be used to pay premiums temporarily or indefinitely
• additional contributions are required to maximize CV growth
• CV can be used as collateral for a loan

You might be wondering if I am a WL salesman? I am not. I simply have done my research. Term and WL insurance have their uses. In order for Whole Life to be used correctly it must be designed correctly. I have to admit that most agents don't understand how to properly design a policy. If interested I can provide some references.

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