Today your house burned down, or was flattened by a hurricane or a flood. How will you replace the many elements that made up your household, from beds and linens to video games and bicycles? A good house inventory is a great tool to have in the event of such a disaster.
One of the most convenient, free helpers I've found to aid in organizing such information is the program Know Your Stuff, which you can download free from the Insurance Information Institute. The program, which runs on PCs and Macs, coordinates your home inventory information through a set of helpful screens. Adding photos of items and receipts is a snap, as well, and checklists will help you ferret out those overlooked items that can strain your budget if you have to replace them out of your own pocket.
A paid add-on option worth considering is Vault24, which for $15 a year allows you to upload and store your inventory on its server in Switzerland. All too often, homeowners who face such disasters realize they have stored their insurance info at home, now buried in the rubble.
As you can imagine, a good inventory not only will help you get fully compensated to the limits of your policy by your insurance company; it can also speed your claim.