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What Would You Grab If Your House Were on Fire?

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Occasionally, I play a grim game I call "Grab and Run" -- a mental exercise where I plan which items I would take with me as I flee an impending disaster, such as a tornado, hurricane, or sudden ozone failure. It goes something like this: dog, leash, sneakers (the cute ones), cell phone, saline solution, photo album, mascara, and my iPod.

Everyone plays this game, right? Anyone?

Fine, so the occasional foray into Catastro-fantasyland may be a sign of a low-level anxiety disorder. Still, preparation (psychological and physical) is the best defense against the demons of disaster. If a fire, flood, killer bee or alien invasion happened right now, how prepared are you to deal with the aftermath?

The right way to worry
While a beekeeper's suit or a personal bomb shelter might help you rest easily at night, there are more practical ways to protect your personal treasures.

Personal safety is always first, of course. But after that, insurance companies and state and federal agencies bear the burden of helping families rebuild and replace material possessions. However, it's not the blender that brings most families comfort and joy. It's peace of mind.

When wildfires threatened estate planner and author Martin Kuritz's home in California, he realized the value of things he could never replace: a five-page letter his mother wrote to him before she passed away and a stack of letters his dad sent to his mom during World War II. His important papers, documents, and computer files were also threatened.

Fortunately, Kuritz's home and possessions were spared. But the scare inspired him to develop a list of tips (PDF file) to help others avoid the tragedy of losing irreplaceable belongings and a family's legacy. These include keeping a small fireproof/watertight safe and plastic file boxes around to both protect such treasures and make them easily portable.

8 ways to safeguard your financial house
Safeguarding beloved belongings is only part of the preparation process. We've had plenty of recent reminders (from Hurricane Katrina to Haiti) underscore the importance of disaster-proofing our financial houses as well as our physical ones.

Trying to recreate a lifetime paper trail with waterlogged wills and insurance policies only prolongs the sense of being uprooted.

Here are eight tips on keeping financial damage to a minimum:

1. Open a safe deposit box at your local bank. Make sure it's large enough to accommodate your valuables, and keep an updated inventory of its contents. Also make sure the box can be accessed by another trusted person should you be unable to do so.

2. Make copies (or get duplicates) of every important document in your file cabinet. These include wills, trusts, health-care directives, and powers of attorney. If you don't have these documents in place already, here's how to get started. If you need help setting up a solid estate plan, a fee-only financial pro can help. (Find a trustworthy one in your state via Fool partner Garrett Financial Network.)

3. Store these documents and any others containing confidential or sensitive data in your safe deposit box or home safe. A safe is also a good spot for your spare keys, irreplaceable items, and valuables (such as jewelry and coin and stamp collections). Originals or duplicates of photos, negatives, and other paperwork should be kept off-premises -- at your office, perhaps, or a trusted friend's home.

4. Maintain a current list of secret passwords, access codes, PINs, the combination of your home safe (or the location of the spare key), and other confidential data. Store this and other confidential information (along with the spare key to your safe deposit box) at a secure, but readily accessible, location.

5. Make important items portable. Items that cannot be photocopied and/or must be kept at your home should be stored in portable file boxes. Write "Take" on the tops and sides of the boxes and store them in a place where they can be easily accessed in the event you are forced to evacuate. Keep an empty file box at the ready for the contents of your home safe. If you are planning to be away, consider storing these items with someone who can remove and/or protect them should a disaster occur in your absence.

6. Make a current inventory. A room-by-room written (or video) inventory of all of your possessions will help speed the process of insurance claims should it come to that. Include items in your garage, basement, and attic, plus serial numbers, dates of purchase, and purchase prices where applicable. Store this information in your safe deposit box.

7. Create Command Central for your family. Life is complicated, and unfortunately, so is death or incapacitation. If you were unable, would your loved ones be able to take over the family finances in a pinch? You can make it easier on your family with a "Grab-and-Go" box containing all the key information needed to keep your finances on track. See "Get It Done: Create a Grab-and-Go Box" for a rundown of items to include.

8. Preserve the memory of items like artwork and plaques by taking digital photos of them to be stored off-premises. During an evacuation, it might be hard to cart off a sculpture while wrangling dogs and kids. The same goes for computer data. Back up your hard drive frequently and store it in the safe or off-site.

Start with one or two items on this list and work your way down. Doing so will ensure that your stuff will be around for future generations ... so that they can play "Grab and Run," too.

Don't just prepare for a disaster, prevent one
Don't let a preventable disaster destroy your way of life. Even those with the simplest finances need a bulletproof estate plan. Use our How-To Guide to put the proper safeguards in place. If you need a second opinion or help developing a financial plan from the ground up, The Garrett Planning Network is offering a limited-time 10% discount for new Motley Fool clients. Just click this link, search your state, and look for the Motley Fool icon to identify participating advisors.

When she's not playing "Grab and Run!" Dayana Yochim plays ping-pong. Copies of the disclosure policy have been put on chips implanted in various employees for safekeeping.

Read/Post Comments (2) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 08, 2010, at 10:48 PM, DocuHome wrote:

    I have a great story to tell. (If I used DocuHome before my house burned in Malibu, I would be in much better financial shape today). Latest statistics... of the 53 homes destroyed in our fire, over 90% of the homeowners were underinsured. CRAZY!


  • Report this Comment On April 08, 2010, at 10:53 PM, a9db0 wrote:

    Living for years in Hurricane zones, I do this annually. I've got it down to just how to pack the car. A couple of additional hints:

    ) Keep a financial inventory - a simple spreadsheet listing institutions / account numbers. Just remember to keep it secure.

    ) Password list. Does no one any good to know where your accounts are if they have no access. This includes online accounts. Keepass is a nice, secure tool that can help.

    ) Personal property list. Know what was where.

    ) If you're computer centric and you don't have a laptop or external drive, invest in a removable drive cage. It's an enclosure that lets you easily pull your hard drive out of your computer and take it with you without the muss of hauling a full size tower.

    ) Got a stack of letters / photos from ages gone by? Scan them. They won't be original, but they are far more portable that way. And can be backed up. You are making backups, right?

    ) Make backups, and keep copies offsite. And no, I don't mean at your office. A couple of states away is a good measure. You have friends or family living elsewhere? Swap backup DVDs periodically.

    ) Update these annually. Stuff changes / moves /gets added to. Inventories need to be updated.

    ) Be ruthless about what you think you need to take. Stuff can be replaced, but not people. Get yourself and loved ones out of harms way.

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