Insurance Pros Advise—

Home Inventories Can Help Keep Disaster From Striking Twice

By John Voket

With the aftermath of Gustav’s visit to the Gulf region fresh in everyone’s minds, and hurricane season not due to peak until September 10, local and state insurance professionals are recommending consumers be prepared.

According to new research by the Connecticut Insurance Department and the National Association of Insurance Commissioners (NAIC) nearly half — 48 percent — of Americans said they did not have an inventory of their possessions. Of those consumers who reported having a checklist, 32 percent had not taken any pictures and 58 percent had no receipts validating the cost of their possessions.

In addition, 44 percent of respondents acknowledged that they had not stored their inventory checklist in a remote location.

“A comprehensive list of your belongings and their value will ensure adequate coverage and help when filing an insurance claim after a disaster,” said Insurance Commissioner Thomas R. Sullivan.

That advice is validated by Ray Manzi, the new owner of Newtown Insurance Service.

“It must be understood that when a homeowner files a claim with an insurance company the burden of proof is on the homeowner to substantiate the claim,” Mr Manzi said. “Simply put, you can be required by the insurance company to prove, or at minimum list, that you had what at the time of the loss.”

Documentation can be written lists including descriptions and serial numbers, photographs, videos, appraisals, and receipts, Mr Manzi said. But a much better way to document is to use video tape.

“If you do not have a video camera, borrow one. Stand in the center of each room in your home and slow pan 360 degrees,” he recommended. “Narrate if you wish. Shoot inside closets, drawers, cabinets, garages, attics, and basements. Within a half- hour you can document your entire house.”

Two things to remember: Update the tape periodically to make sure it stays accurate and keep the tape somewhere secure off premises.

Mr Manzi said in the event of a major loss a copy of the tape could be handed to the adjuster, and that, along with whatever receipts or appraisals you have, will put you in a much better position to collect what you are entitled to with much less hassle.

“There was a time that many insurance agencies, my own included, would give out inventory books and encourage clients fill them out,” he added. “Unfortunately is was a time-consuming process that many clients simply never got to.”

While natural disasters like tornados, large-scale floods, and hurricanes may be few and far between in Connecticut, James Galalo, Jr, of Preferred Insurance of Newtown knows that theft and fires can be devastating disasters for individual homeowners as well. He said the easiest items for burglars to steal quickly — electronics and jewelry — are the ones to be particularly concerned with on homeowners’ policies, and the items that should always be included in one’s inventory.

“Most people don’t realize that standard homeowners policies have a maximum payout of $1,500 for jewelry. So after a typical $1,000 deductible, the maximum a homeowner will get in reimbursement is $500, even if their loss was $5,000.”

Mr Galalo suggests that insureds who want to be certain of getting appropriate reimbursements for theft losses should not only have the items inventoried by photo or video, but also get those items individually scheduled on policies, even if it involves a premium bump.

“Burglars who hit a home want to get the most high return items quickly, so they go for things like big screen TVs,” he said. “Now in a fire, there is usually something left over to identify, but if it’s a theft, a standard policy has limits on what it will pay.”

He said receipts are helpful, but the more detail the better.

“Keeping an off-premises copy of photos or video, or even an inventory with receipts will make things easier if there is a claim,” Mr Galalo said. “And every new item should be added to that inventory, with an overall periodic update — every two or three years at least.”

Even enhancements to the construction of one’s home should be noted in the inventory record.

“A lot of times people do a renovation, a kitchen or bath, and never notify the agent,” he said. “If you don’t notify your agent on a $10,000 kitchen renovation, you need to let your agent know to be sure you are insured properly.”

With renewed concerns spurred by disasters like Hurricane Katrina in 2006 and most recently, Hurricane Gustav, as well as the ever-present risk of theft or fire, the Connecticut Insurance Department is offering a downloadable, Home Inventory Checklist at www.ct.gov/cid. Consumers can obtain additional disaster preparedness information by calling the toll-free consumer hotline at 800-203-3447 or locally at 860-297-3900.

“Creating an inventory [of any kind] and storing it in a safe location away from home is one of the most basic — and most effective — disaster preparedness steps anyone can take to help protect themselves and their financial future,” Commissioner Sullivan said. “This small investment of time will reap many benefits in the aftermath of a disaster.”

View the Disaster Preparedness podcast and other important information on the Connecticut Insurance Department website at www.ct.gov/cid site search: Preparedness. Or, call its toll-free consumer hotline at 800-203-3447 or locally at 860-297-3900.

Three Ways To Prepare For A Disaster

HARTFORD — The Connecticut Insurance Department has assembled these helpful tips to ensure disaster does not strike twice. By following these helpful tips, homeowners can help ensure they will not face a dispute on claims if they face some disaster like fire, flood, hurricane, or tornado:

1. Understand your insurance policy. Know what is and is not covered in your policy. You might need additional protection such as flood insurance. For more information on flood insurance visit www.floodsmart.gov. It is important to note that flooding is generally not covered under your homeowner’s policy, and it takes 30 days for flood policies to become effective.

Find out if your policy covers additional living expenses for a temporary residence if you are unable to live in your home due to damage from a disaster.

Find out if your possessions are insured for the actual cash value or the replacement cost. Actual cash value is the amount it would take to repair or replace damage to a home and its contents after depreciation. Replacement cost is the amount it would take to replace or rebuild a home or repair damages with materials of like kind and quality, without deducting for depreciation.

2. Ensure your coverage is adequate. Appraise your home periodically to make sure your insurance policy reflects home improvements or renovations. As you acquire more valuables such as jewelry, family heirlooms, antiques, and art, consider purchasing an additional “floater” or “rider” to your policy to cover those special items. Contact your insurance company/agent annually to review and update your insurance policy as needed.

3. Inventory of your valuables and belongings. This should include taking photographs or a video of each room. This documentation will provide your insurance company with proof of your belongings and help to process claims more quickly in the event of disaster.

To enable filing claims more quickly, keep sales receipts and/or canceled checks. Also, note the model and serial numbers of the items in your home inventory. Remember to include in your home inventory those items you rarely use (e.g., holiday decorations, sports equipment, tools, etc).

Store copies of all your insurance policies in a safe location away from your home that is easily accessible in case of disaster. You may want to store your policies and inventory checklist in a waterproof, fireproof box or in a safe, remote location such as a bank safe deposit box. Consider leaving a copy of your inventory checklist with relatives, friends, or your insurance company/agent and store digital pictures in your e-mail or on a website for easy retrieval.