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Protect Your Possessions

Homeowners insurance is not enough; here's how to make sure your possessions are covered in case of disaster.

You have homeowners insurance, and you've made sure that the contents of your house are covered in case of an disaster.

Or have you? If you lose all the possessions in your home due to a fire or otherincident, the insurance company will not simply reimburse you on yourword.

One of the biggest mistakes that people make when insuring theitems in their homes is simply failing to document all of them.Without documentation, one of two things will usually happen when youfile a claim; both are to your disadvantage:

    You simply can't remember all of your possessions and file a claim based on what you can remember at that time. Since this is a time of high stress, you will most likely forget a large number of the itemsyou owned and won't receive the full amount you are due. (This can become even more frustrating as time goes by and you remember more things you owned but forgot to claim.)

    You try to claim everything that you owned, but because you have no documented proof, some of your claims are denied by the insurer. This could happen to you even if you are covered by the largest insurers, such as The Travelers Companies and Allstate .

    With today's technology, taking a careful inventory of possessions is relatively easy. One of the biggest reasons people delay documenting all their possessions is that they believe that it's goingto take a lot of time and effort. While the more detailed thedocumentation the better, having something is better than havingnothing.

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    With that in mind, the first step isn't to make a long, detailed list. The first thing you want to do is take your camera or video recorder and walk through your house and get everything on film. If you are using a video camera, also describe everything as you make the video. Don't forget to get close-up shots of all your high-value items and to open drawers and boxes where items are stored. You should be able to accomplish this in about an hour.

    The next step is to upload the photos or video onto your computer and then send them to yourself as an attachment to one of the free Web-based email addresses (Google's Gmail, Yahoo! Mail, MSN Hotmail orsomething similar). In the past, people were always told to store acopy of this information in a safety deposit box or at a friend'shouse. That works fine when the incident is confined to your house butdoesn't work so well when a hurricane strikes. Having all theinformation stored in cyberspace can help ensure that you still have accessto your records even in the event of a widespread disaster.

    These two steps have accomplished the minimum documentation you need, and you now have visual (and audio if you used a video) proof of your belongings. While there may be some hitches when making a claim, at least you have proof to argue your case and have taken steps tomake sure you don't forget to claim something.

    Again, the more detail the better. Detail will help make the claim process smoother. It's at this point that you want to begin making a detailed list of all the valuables that you have just recorded. The list should include the purchase price (sales receipt should be kept if possible), the store where each item was purchased and the make and model if applicable. If the item has a serial number, that should also be included.

    While documenting everything, you should take a special look at art work, collectibles, jewelry or other valuables that you believehave a significant price tag. Contact your insurance agent to makesure that these items are fully covered under your current policy. Ifnot, they may need to be insured separately. It is then simply amatter of updating your list as you make new purchases.

    Nobody wants disaster to strike, but in the event that it does, youwill be extremely happy that you took the step of recording all yourpossessions for both the time and money it will save you.

    Jeffrey Strain has been a freelance personal finance writer for the past 10 years helping people save money and get their finances in order. He currently owns and runs