Beating Broke

Personal Finance from the Broke Perspective

3 Ways to Record Your Stuff for Personal Property Insurance

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So, you’ve got auto insurance for your car, health insurance for your health, flood insurance for your property, and home insurance for your house.  Everything’s covered!  Yay!  Whoa there.  Not quite.  These days, it seems like you’ve got to insure everything if you want it covered in case of loss.  There’s pet insurance.  Celebrities are insuring their body parts.  And, while you probably don’t need to insure those killer legs, you probably want to check to make sure you have some sort of personal property insurance (or personal belongings insurance).

Despite what you may think, your home insurance doesn’t necessarily cover your personal properties.  They might have some small rider that will pay out a small amount to replace certain essentials like clothes and such, but if you’re ever in need of it, you’ll quickly find that it will fall far short of replacing much of the personal property that you owned.  Some of the things will have caps on them for value.  Got a killer gaming computer?  Not covered to it’s full value.  Many people are choosing to add a personal property policy to their list of insurance policies.

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Part of getting a personal property policy is being able to identify the item, it’s value, and prove both.  Here are three ways you can use to record the property that you own, and do it easily.

  • Spreadsheet — Create a spreadsheet for each room and list the items you are insuring from that room.  Be sure to record any serial numbers and model numbers that you can.  A short description can also be helpful.
  • Take Pictures — Combined with a simple spreadsheet, take pictures of the items that you own in each room.  This can help identify the items, and act as proof of serial and model numbers as well as condition.
  • Contents Video — Take a camcorder (or any device that records decent quality video) and walk through each room of your house, recording each item that you’ll be insuring.  Again, be sure to record serial numbers and model numbers.  You can use the ability to record voice to add in descriptions as you go.

Properly recording and keeping track of your property can make purchasing your personal property insurance a much easier task and make sure that you’re insured for the proper amounts and items so that you don’t find yourself trying to replace expensive items that you though your home insurance would cover.

photo credit: 111 Emergency

Adjustments to Make (Price Checking)

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I’m making this post in part to share with you, but also to make a reminder for myself of the things that I need to look into.  One of the mistakes that I and many other people make is not shopping around enough.  While you may have found the best deal when you bought something, if you are still paying for it, you might not be getting the best deal still.

The most obvious place where this could be true is with insurance.  I’ve been with my insurance company for about 10 years.  When I first purchased the insurance, I did a fair amount of shopping around and comparing and bought the insurance that was the best fit.  Since then, many things have changed.  I got married.  We’ve had two children.  We bought a house.  We both turned 25 several years ago.  All of these things could easily cause some drastic changes that really warrant a new comparison.  But, we never did that.  It’s time we did.  Over the next few weeks, I’ll be doing a bit of shopping around for better insurance rates and coverages.  In particular, our home owners insurance seems much higher than it should be, and consequently, I am now in the market to find cheap home insurance cover.

The other thing that I really need to look into (and should have a while ago) is the mortgage on our house.  We managed to buy our house when rates were good.  We’ve since added a second mortgage that is about 25% of the original mortage’s size.  The rate on that is not as favorable.  (9% ish)  So, I need to look into whether refinancing the whole thing and rolling the two together might help us out with a lower overall rate and maybe even a lower payment.

That’s just the two things that came up recently.  I’m sure there are plenty of other things that need to be checked regularly that I and others do not.  What are the things that you check regularly to save money?

Do You Shop Your Insurance?

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My wife and I are thinking of selling our house and buying something a bit bigger.  The house we are in is a little small for our expanding family.  It could be done, but not very comfortably.  In that process, we started our research by visiting with a loan officer to run some numbers and make sure that we were shopping in a price range that we could afford.

One of the subjects that came up in the process is the subject of home owners insurance.  As we discussed it, I mentioned what we were currently paying.  And then the discussion really started.  Turns out, our loan officer thinks that we are over paying by quite a bit.  By about 40% if the loan officer is even close to correct.  Ouch.

When we bought our house, the insurance was the last thing on my mind.  When the day came to sign all the paperwork, the loan officer that we were using at the time (not the same one we saw the other day) asked for the proof of insurance.  Which I did not have, because I had not gotten the insurance yet.  I didn’t see the purpose in insuring a house that I didn’t technically own yet.  I was wrong.  I couldn’t take ownership without proof of insurance.  Two very quick trips to the insurance agent that has our car insurance account later, I had my home owners insurance, and was able to sign the paperwork and take ownership.

In my haste, I took what I could get and what the agent suggested.  Because our house loan has an escrow account, I never really see the bill for the insurance.  It never really got brought up, and it just continued on it’s merry way.  I fell prey to a common personal financial mistake.  I didn’t shop around.  And I didn’t revisit my policies to check for pricing and coverage.

Committing that mistake may only be costing me a few hundred dollars a year.  I say only, because it could certainly be much worse.  Now, as we begin shopping for a new house, we’ll also be shopping for insurance.  Depending on what we find, we may be changing agents.  We may even change agents for the auto coverage as well since we’ll be shopping that around as well.  It doesn’t hurt to look, right?

I know I’m not the only one to ever fall victim to this error.  If you’d like to share your story, you can in the comments below.