smart spending

Documents you need when disaster strikes

Neither Freedman nor Childs is a fan of using bank safety-deposit boxes to store key documents. They suggest that a bank could be destroyed or inaccessible after a disaster.

Instead, Freedman uses a portable hard drive with his computer so he can grab it and go.

"It's one of the best insurance policies you'll ever have," he says.

Childs prefers remote online storage, and recommends sharing the password with a trusted family member or friend who can access the account in case of an emergency.

Some banks now offer online safety-deposit boxes that can protect documents, photos and videos.

Have proof

In addition to having access to key documents, it's important to have proof of your valuables when filing insurance claims.

Michael McRaith, the former Illinois insurance director and now head of the Federal Insurance Office, says individuals should go room by room through their homes, writing down the contents and making special note of things like antiques, jewelry and collectibles.

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He recommends keeping one copy of the inventory at home and a second at another location, such as with a relative, at the office or in a safety-deposit box. The list should be updated periodically, with receipts kept for big-ticket items.

Having photographs or videos of your possessions is crucial, Freedman says. Without it, "it's difficult to know how many shirts you had, how many pair of pantyhose a woman had."

If someone needs to file a claim after a disaster, the inventory, receipts, photos or videos help verify their existence and value, and ensure no one makes a $1,000 claim for something really worth $100, McRaith says.

Those who have no insurance or are underinsured can record a loss on their state and federal income tax forms. Having documentation of their possessions helps provide the proof they need, Freedman says.

But the key is advance preparation. By doing so, "there's lots of peace of mind," Childs says. "That's really priceless."

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