Hopefully your farm will never face a severe weather disaster. But, the floods, tornadoes and other natural disasters that have swept across the country this year show it can happen to you. While you can’t prevent these severe challenges, a little preparation can go along way in coping with the stress.
“Settling insurance claims can be a daunting task,” write University of Nebraska educators and economists Austin Duerfeldt and Robert Tigner.
The first few items that come to mind are easy to remember and price out. For instance, you lost a barn roof, or a pickup was totaled.
But, if you have a major natural disaster, the list of losses becomes much longer. Do you remember all the tools, appliances, electronics and other small asset items you have?
“While these are usually small dollar assets, their total value can be quite substantial,” Duerfeldt and Tigner explain. “Creating and maintaining an inventory record for your home and business will help you settle insurance claims faster, verify losses for tax returns and help you identify the correct amount of coverage.”
Take these steps, the experts suggest.
- Create an inventory worksheet. This can be paper or digital. (Find sample worksheets here). Include categories such as the item, manufacturer, model or serial number, purchase date, location and purchase price. You might find it helpful to create a list for each room or building. The idea is to keep the process as simple as possible for both the current effort and future upkeep. Keep proof of value of assets by holding onto or scanning sales receipts, purchase contracts, and appraisals.
- Catalog all of your important items. You may want to have a $50 minimum value to make the list. Pick an easy spot to start, the experts suggest, such as a closet or small office. Add each item. For items such as clothing, list them by a general category and do a total value.
- List any items that may need special insurance coverage. Identify big-ticket items like jewelry, art, guns and collectibles. Put a star next to those type of items and discuss them with your insurance agent to ensure you have adequate coverage.
- Take a few photos or videos. As you record your inventory, taking pictures of individual assets or a video of a room. This can give an extra layer of protection, the experts say, as you may catch something you missed, or at least have proof of ownership of a claimed asset.
- Don’t become overwhelmed. Once you start an inventory list, try to keep going. Even if you have an incomplete inventory it is better than nothing at all.
As with most accounting and recordkeeping processes, this is a living, breathing document that changes all the time, Duerfeldt and Tigner note. Try to make it a habit to add significant new purchases to the list as you acquire them.
Learn more: Keeping Track of Your Assets