When it comes to an insurance check to replace the items you need to replace after a loss, don’t expect to hear your insurance company say “the check is in the mail.” There are some steps you need to take before that happens.
OK; so you think you did everything right. You have sufficient coverage. You have a yearly review with your insurance agent to discuss any changes that have taken place on your home or the contents. Now you are facing a major loss due to a theft, fire, or natural disaster and … what? … they are not going to just send you a check?
The check isn’t in the mail
There are reasons for that. They can’t send you the total amount of your insurance coverage if you don’t have a total loss. Your insurance company doesn’t know the real value of your loss until you provide the list of items to them. They also don’t know the value of each individual item. Without a list of each item that needs replaced, they don’t have any idea how much you need to get back where you were before the loss.
You’ll need to list each item. Yes, every single item! Listing furniture and other large items will be easy enough. However, you will also be required to list clothing, tools, toys, CDs, DVDs, books, shoes. But that’s not all. You’ll also need to itemize all bottles of perfume, bathroom toiletries, bottles of laundry soap, bars of soap, paper products, food items, bottles of nail polish, tubes of lipstick, tubes of chap stick, razor blades, cleaning supplies, extension cords, holiday decorations, kitchen utensils, decorative items, picture frames…this list will go on and on. Every single item!
Many ask why they should bother with these little items. Once they add up the cost of every-day consumables, they realize how easy it would be to face a substantial financial loss. Have you priced a tube of lipstick lately?
You’ll be working with an insurance adjuster to settle your insurance claim. Having proof of ownership will make the process go much faster, and with a lot less stress. One of our clients experienced the difficulty of trying to remember what used to be in a now-empty building.
Create an inventory prior to your loss
Tom and Kathy (not their real names) own a family farm, and unfortunately had a lot of power tools and many types of hand tools stolen. They were told to create a list of each item that was missing, the manufacturer, and model and serial numbers. They didn’t have an inventory of these tools, but did the best they could to remember and record what they used to own.
Since the tools were used frequently, they always purchased high-value, proven brands because they learned that farm work required excellent quality. When the adjuster reviewed the list Tom and Kathy created to submit their claim, he asked for proof that all tools were top-of-the-line. They went back and forth over the value of these items for more than three months. At one point, the adjuster stated that if they had a model or serial number, he would be able to approve the claim more easily. He told them he had a difficult time believing that everything they owned was in the high-value range.
Having an inventory, created prior to the theft, would have given Tom and Kathy the information they needed to submit a claim quickly and thoroughly. Be proactive and be prepared. The time and frustration you’ll save is worth the effort now. It’s also worth the investment if you choose to hire a certified inventory professional.
Over the past 30 years of full time occupation in the electronic security profession, I have seen my share of wrongs and rights. Most folk I come across feel things are getting worse rather than better.
One only needs to watch the nightly news for five minutes. Home invasions, stabbings, break-ins, hold-ups, murders, and physical assaults, on and on – many at an all-time high. What’s a prudent person to do?
Practice the 5 P’s…as my father would often spout (often adding a 6th P which I shall not repeat).
We can’t do everything but we are fools if we do nothing. One great thing about technology (unlike our bodies) is that it generally gets better and cheaper over time. This is certainly the case in electronic security. It’s simpler and more affordable than ever while much better performance.
Video Surveillance helps us see and hear better, 24/7 – as it never sleeps or goes off duty. We are often placing cameras to cover the driveway, front door, back yard and beyond. They are handy for seeing who is at the front door without having to get up or be seen inside the home. It is great for monitoring help around the house. Did the UPS driver slam down that package? Or who took it off the porch? Or what happened with so and so? A great thing is the DVR (Digital Video Recorder) has a tremendous memory built-in. It ‘is what it is’ as ‘Ignorance is bliss’ only to a certain extent.
Modern alarms are wireless, more reliable, AND affordable than ever. You can easily incorporate lights, locks, video, garage door control, and so much more. And it’s generally easy to include medical alerts, fire, carbon monoxide, water detector, and so forth. It’s great to be ‘in the know’ whether you are home or away.
Of course, they are not fool-proof, so it’s always a good to idea to have a back-up plan like quality insurance and a home inventory to protect the replaceable. Like the old saying, ‘an ounce of prevention is worth a pound of cure’.
Kirk Booher has provided alarm, security, and surveillance systems for most of his adult life. OnGuard Security Solutions custom designs security systems based on needs and budget. Headquartered in Metro Indianapolis, OnGuard also has locations in Terre Haute, IN; Cincinnati, Dayton, and Columbus, OH; Chicago, IL; and Louisville, KY. ~ Kirk Booher, Owner/Operator of OnGuard Security Solutions (317) 572.5777 www.WeAreOnGuard.com
Emotion! Why is that word used so often when people talk about the loss the experienced after a loss? Whether it is from a fire, theft, or natural disaster, realizing what has been destroyed can be devastating.
The emotion felt is raw and immediate. It is an unexpected event in your life that you didn’t anticipate. When it’s a theft, you feel violated that someone entered your home or business and dared to take what you own! When the loss is from a fire or natural disaster, many state they feel “why me?”.
The financial loss
And soon after, the victims of this loss realize the financial loss that will most likely occur, adding more stress to their lives.
A theft investigator relayed the story of a man who was burglarized. Alan (not his real name) was so distraught at the thought of being victimized that he could not even remember the brands of his televisions when the police asked for the information.
A month later, he still had not filled out his police report or insurance claim. Alan stated that he became so overwhelmed with negative emotions when he thought about the burglary that he just couldn’t force himself to fill out the paperwork! Therefore, the police had no information to help them even attempt to recover the stolen items. His financial recovery was being delayed.
The final result
What was his financial recovery from his insurance company? Zero dollars! He found out the theft was facilitated by a family member, and the additional emotion he felt because of this encouraged him to do only one thing – just buy new and put it behind him. He just gave up trying to remember the information that the insurance company and police needed.
Imagine how much easier Alan’s experience would have been if he had an inventory of his belongings created prior to the theft. He would have been able to provide the manufacturer, serial number, and model number to both the insurance company and the police. His claim would have been settled quickly, which would have provided the funds to purchase new.
(Since hearing Alan’s story, we have talked to police and found that it is more common than one would think that a burglary is committed by someone the victim knows.)
I was speaking with a woman recently who had a burglary. We talked about the emotion you go through when you know someone has been in your house, pilfering through your stuff and pulling things out of your drawers while looking for your valuables. She said it will take a while before she can walk into the house without a bit of hesitation…always wondering if she’ll find the same mess she did on the day of the burglary.
She then switched to the financial loss she experienced. The total loss was in the thousands. We talked about the detailed list she was asked to complete – for both the police report and her insurance claim. They asked for serial numbers and model numbers. They wanted to know the manufacturer of the electronics.
The police and insurance adjuster asked for photos. She had neither a prepared inventory or photos of her belongings. When discussing her jewelry, all she could tell them is whether each item was gold or silver. She often couldn’t give more detail except that there was a stone. Unfortunately, she was unable to offer details of jewelry she received from her mother and grandmother, details such as what type of stone, and whether it was man-made or a valuable gem. When asked for pictures, she had none that were close-ups, so they were of little help. Having photos would have helped, as the police would have been able to distribute them to the pawn shops.
“I have homeowners insurance,” she said. “I just didn’t know I’d have to list everything!”
Unfortunately, we often hear that or similar remarks. Take it from this burglary victim – you DO need to know what you own if you want to receive an equitable settlement from your insurance agent! Don’t wait until it’s too late.
In the United States, one in every 36 homes will be burglarized this year. According to the FBI, that means that there is a burglary every 15 seconds! There are no statistics available to show the percent of how many are repeat break-ins, but our discussions with burglary victims and police indicate this is on the rise.
These statistics prove the importance for homeowners to have an inventory of your belongings. If you are the victim of a burglary, these statistics also stress how essential it is to update your inventory as soon as you purchase the replacement items. Indications are you just might need that information again in about three or four months.
So what is the reason for this specific timeframe? This is the normal time it takes for someone to complete their list of items stolen for the insurance company (you do know you will need to provide a detailed list to your insurance company, right?), receive their insurance settlement, and purchase replacement items.
Burglars have found that a second burglary is much better for a few reasons. There is no question about what is inside, so they know it will be a worthwhile “visit.” It will be a much faster in-and-out, since they know exactly where everything is. And, they know, going in, exactly where the “good stuff” is, based on the first theft.
According to A Secure Life, in addition to cash, there are common items commonly targeted: electronic equipment, gold, silver, jewelry, and guns. These are items that are easy to sell to pawn shops or on the street. In addition to stealing items they can readily resell, they also steal items that are easy to carry from the home.
Most likely, they are watching your house, planning the second break-in. Take precautions by not putting the boxes of your newly purchased items at the curb, so they aren’t aware that you’ve already replaced the stolen items. Place jewelry and other small items in a different, less obvious, location. If you have an alarm system, be sure to always have it activated.
And, of course, be sure to have an updated inventory!
Other times, they choose a house to burglarize at random. A common ploy to learn if anyone is home is to just knock on the door or ring the bell. If no one answers, they proceed to enter and help themselves to your belongings.
The more sophisticated thieves, who target their victims, learn when the house will be empty. They often even know for how long! Here are a few real examples how:
- A man posted on Facebook, announcing that he was going out to dinner, naming the restaurant. Within minutes of the post, this person was burglarized. The police assume it was a neighbor who saw the dinner announcement on Facebook.
- A family shared vacation photos on social media sites, only to return home to an empty house. Burglars backed up a truck and emptied the house while they were hundreds of miles away.
- Even more disgusting, a growing trend is to watch the obituaries, noting the times of the calling hours and funeral service. Easy enough for the burglars to know when no one will be around. Additionally, relatives of the deceased are also listed, giving the burglars a few hours to hit more than one house.
- A woman stated she was leaving for work, saying goodbye to her Facebook friends. A burglar broke into her home later that day and stole all of her jewelry.
The timing of these burglaries could be coincidences, but it doesn’t hurt to take precautions. Law enforcement officers state that most burglaries are committed by someone the victim knows. Maintain some privacy by not posting your itinerary each day on the various social media sites. Vacation photos are fun to share, but if your house is going to be empty while you’re away, wait until you return home to upload them for all to see. It’s not just social media – be cautious about discussing your plans when in a crowd. You never know who is listening to your conversations, learning when you’re going to be away for a few hours or a few days.
You certainly don’t want to spend your summer days filling out insurance claim forms (which would be easier if you had an inventory of what was stolen.) Enjoy your summer, and be safe!
Common answers when I ask people that question are that they:
- have a home inventory
- make sure their insurance is sufficient to replace the losses (proven by your home inventory)
- have the collectibles, artwork, firearms, etc., scheduled
- have a security system
- keep their high-value items in a safe at home or in a bank safe deposit box
Other viable actions taken, but often said with smiles on their faces, are that they:
- live near a fire hydrant or a police station
- own a gun
- have a big – very big – guard dog
Some even decide to sell their items.
An article in the Cleveland Plain Dealer, John Havlicek’s 1960 Ohio State basketball championship ring among items up for auction, discussed the reason behind the basketball great’s reason to sell his championship rings from his years as a Buckeye and a Celtic. There are many other memorabilia that he also sold at auction. His explanation? According to the article, “Havlicek said he is so worried about something happening to some of his memorabilia that he would rather sell it now and get it into the hands of people who want it, rather than risk losing it.”
Guess it’s time to start marketing our inventory service to those who are the recipients of these auctions, because someone wants these items. Once the purchase these collectibles, they will want an inventory of these valuables to prove ownership so they can protect their assets and ensure their financial future. After all, it’s not the sentimental value – these purchases are strictly a financial decision. An inventory of these collectibles is certainly a document they will need!
I hear a lot of comments regarding insurance company policies and procedures after someone experienced a loss from a fire, burglary, or natural disaster. These conversations happen at parties, open houses, networking events – you name it, these conversations come up. Why I’m involved in so many is because I own a home and business inventory company.
So, what is not uncommon that people are talking about regarding insurance companies?
- You’ll be asked for serial numbers.
- You’ll be asked for model numbers.
- You’ll be asked for the name of the manufacturer.
- They will expect you to list what you paid for each item.
- They will want to list the fair market value of each item.
- You’ll be asked when you purchased the item/how old each item is.
- You’ll be required to provide a detailed list of what was damaged, destroyed, or stolen. And the means every single item you want to be reimbursed for. That includes food, cleaning supplies, cosmetics, decorative items, in addition to your large ticket items.
How do I know this? In addition to providing an inventory service for disaster preparedness (creating the inventory now, before you need it), we also assist with after-loss inventories. We have listed items for replacement that include the number of
- tubes of lipstick
- rolls of toilet paper
- bottles of laundry soap
- pods of dishwashing detergent
- bottles of nail polish
- boxes of cereal
- cans of food
The list can go on forever, as you can see. So, when people express what they had to go through to list their losses before receiving reimbursement from their insurance company, our reply is, “This is not uncommon.” I just wish more people realized the importance of having an inventory prepared while everything is still in one piece!
Guest Post: Fishbowl Inventory discusses the various reasons to document and track your company inventory. Whether raw goods or personal property, such as equipment, furniture, electronics, knowing the value of your business assets is essential for many reasons.
Tracking your business inventory can save you from a serious financial problem if disaster strikes. Insurance companies need exact details filled out on your claim form. If you do not have accurate records, you could lose hundreds of thousands of dollars. Your business will also struggle to acquire the money needed to buy or repair equipment, the building, and paying for lost income. With accurate inventory tracking, you can easily manage every detail related to your business. Here are three reasons why you need to track your business inventory.
Instigate a Tracking System
To start the tracking system within your business, you need to purchase software. Consider using a cloud storage drive to save your information. Using a cloud drive will prevent you from losing the data in case a fire or flood damages the information you have input. Inventory tracking systems allow you to maintain accurate records. They will record all purchases and will provide a year-end report. This information is helpful for taxes and other business records. Accurate tracking of your inventory will assist with sales goals and purchasing times. If you are worried about when to buy additional raw goods or other supplies, an inventory tracking system will help. The system will give you an average of the past few months, providing you with a general idea of your sales.
If you do not track your inventory, your insurance coverage may not be high enough. Most businesses will start to acquire new assets and inventory items the longer they are in business. If you have not updated your inventory spreadsheet, your insurance might not even cover the costs of a disaster. For example, if you own a pizza restaurant and a fire destroys your business, the insurance adjuster will provide an estimate to the insurance company. The insurance company will then look at your total coverage amount and will replace everything that is covered on their plan. So if you forgot to add your new $14,000 walk-in freezer system or oven, you may not be eligible to have them replaced.
Not only do businesses need to recognize the costs to their personal income and business income, a disaster can cost them customers. Customers may not wait to return to your business for future orders as you repair your business. This is concerning for small business owners as you already struggle to make a name for yourself. Theft is another concern with inventory tracking. If you do not have a system that tracks every single item in your store, your theft loss can be extremely high. Some business owners do not even realize how many employees or customers are stealing items right out of their inventory.
To prevent your insurance company from short-changing you, create a video inventory. A video inventory will include everything in the store along with information about everything. You need to keep receipts, credit card statements, maintenance records, and other documentation on your inventory. Scan these items and save them to your cloud drive and then store everything in a fire-safe box. In the event of a disaster, your entire store is documented on a video and in an Excel spreadsheet. This will help the insurance company when you are filing claims and will prevent you from additional income loss.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business.
What many people don’t know is that their homeowners insurance policy has limits on specific items. We had this discussion twice last week, in fact.
When we’re taking the photos and recording the serial numbers of firearms, and there are more than just a few, we ask them if they have them scheduled (sometimes called a rider). The reason for the question is that most policies have a limit of what they’ll pay if firearms taken during a burglary. This average limit is $2000. So, if you have weapons worth more than that, you might want to consider purchasing a rider.
The same is true for jewelry. The value of fine costume jewelry can add up very quickly, and many of our clients easily exceed their policies’ limits. Cash, antiques, collectibles, and others items can be included in the list of items that are subject to a limited pay-out.
No matter what the full value of your homeowners coverage, the limits mean exactly that – a dollar limit on what you will receive if these items are stolen.
So the old saying of what you don’t know can’t hurt you is SO not true when you’re talking about insurance. Talk to your agent. You aren’t required to purchase additional insurance, but after learning what your loss would equal, and comparing that to what a scheduled item would cost, plus what you are willing to risk losing, then you will be able to make an educated decision.
After we deliver the inventory portfolio, many of our customers take the information to their agent; we’ve been told by agents and our clients alike that it was very helpful in guiding them what to schedule, and for what dollar amount as well.