Documenting details is important when it comes to making claims against an insurance policy, and many insurance contracts require it. Even if you experience damage that would clearly have been covered by your insurance policy, you may be out of luck if you haven’t specifically documented the existence and value of an asset to the company and you have no proof of what you’ve lost. In fact, not only could your insurance claim be denied, but you could also lose other benefits, such as casualty loss tax deductions on your income-tax returns.
A simple way to avoid this problem is to take a pre-loss inventory of your items, using free inventory forms available online from providers like www.knowyourstuff.org or helpful computer programs such as Bento (which can synch with your smartphone). You can upload pictures, assign what room the item is in, and add items like serial numbers and purchase prices. All of this information is stored online, plus you can print the document and file it with your insurance agency.
As one local agent suggests, no adjuster is going to pay for 20 leisure suits based solely on your word, but a picture of 20 leisure suits is hard to argue against. If nothing else, take a few minutes and use your smartphone to photograph your shop tools, manuals and other assets. Many of your smaller items that you are not likely to remember about in the event of a large loss are still expensive to replace. Use the phone to take a photo of the data plate with the serial number of your equipment, large and small. Then transfer it to a memory stick and throw it in your personal safe.
Your agent should be kept up to date on your new purchases, as well. If you add a John Deere 4440 to the farm inventory, make sure to tell the insurance company; otherwise, it will be a lot harder to make a claim when a tree falls on it or it is stolen. Your agent can help you by binding the company when you acquire new property, but you should report it quickly because some policies allow you just thirty (30) days to get property listed on your policy after it is acquired.
This is an excerpt from my book that I co-authored with Pat Dillon, an Iowa food and agriculture lawyer and author of this Iowa agriculture law book. You can purchase a copy of the book “Field Guide: Legal Guide for New York Farmers and Food Entrepreneurs” on Amazon.com. A new (more user-friendly) Kindle version of my book has been recently uploaded (only $9.99 or $2.99, if you own the hard copy of the book).