Keep your important documents safe, handy with these tips

When it comes to keeping important papers in a safe spot, insurance agent Gary Hatano vividly remembers one client's solution.

While visiting the home of a retired military veteran, Mr. Hatano asked to see a copy of his life insurance policy.

“He said, ‘Hold on a minute’ and went to his refrigerator,” recalls Mr. Hatano, a Farmers Insurance agent in Folsom, Calif. From the bottom of the vegetable bin, the retiree pulled out his insurance policy, neatly wrapped in aluminum foil.

While a tinfoil packet under the refrigerated carrots may not seem like the most sophisticated solution, Mr. Hatano said he couldn't argue too much with his client's intentions. In a fire, the packet presumably wouldn't burn and everyone in his family knew exactly where it was.

We should all be so well-prepared. From torrential floods in Louisiana to blistering Western wildfires, this year's weather-related calamities are a reminder that events beyond our control can strike anyone, anytime, anywhere.

If a natural disaster hit your household, would you be ready? We all have important paperwork that we want to safeguard: insurance policies, loan papers, marriage or divorce documents, even the vaccination records of our kids or pets.

Here are some options:

Grab-and-go binder

Having a grab-and-go box or binder can be a lifesaver. Think of it as a one-stop spot to keep all your key documents.

Mr. Hatano says he keeps a document-filled binder hidden at home. It contains copies of all his family's crucial paperwork: property records, bank accounts, (and names of professionals (financial planner, attorney, banker, insurance and real estate agents). There's also a copy of his trust.

Makin’ a list

Another essential safeguard: a household inventory.

In the event of filing an insurance claim, “It's hard to remember what you have,” said Perry Ghilarducci, a Sacramento CPA. He recommends keeping copies of receipts, warranties, serial numbers, and appraisals of your household valuables.

You can record a video or simply make a room-by-room list of appliances, furniture, electronics, books, and clothing. And don't forget the backyard and garage.

Web sites such as www.InsureUonline.org, sponsored by the National Association of Insurance Commissioners, have easy tips on creating a household inventory.

And don't forget your cell phone. Especially when so much of our personal life resides in our handheld devices, you don't want to be stranded if your phone gets lost, drowned, or burned. Keep a card ideally laminated in your wallet with a list of important numbers, everything from your kids to doctors to the financial and professional contacts you might need in an emergency.

Back it up

Whether it's your home or office computer, a backup is essential. A simple hard drive that automatically backs up everything stored on your computer is the first line of defense. But if it's damaged in a fire or flood, all your family, financial, and business files and photos could be wiped out.

To better protect your hard drive, a California company, ioSafe (www.iosafe.com), manufactures a series of hardy protective “safes” for computer hard drives that it claims are waterproof and fireproof, whether submerged in water for three days or burned in intense flames up to 1,500 degrees for 30 minutes.

It's essentially a second hard drive that plugs into a USB port, acting as a tougher twin to your computer's own hard drive.

Others are migrating to storing computer data online in the so-called “cloud,” using backup systems that aren't sitting on their desktops.

Mr. Ghilarducci's firm, for instance, provides online document storage for its tax clients.