Dear Dave,
My wife and I are completely debt-free. We would like to have part of our emergency fund in cash inside a heavy duty safe at home.
How should we document this cash in the event of fire or theft?
Also, would our homeowners insurance policy cover cash?
— Will
Dear Will,
Typically, homeowners insurance policies have a limit as to how much cash they will cover.
I’d advise re-reading your policy, and double checking with your insurance agent just to be sure.
When it comes to documenting valuables, I’d suggest making a video or taking photographs. Just to be extra cautious, you could store these in a safe deposit box at your local credit union or bank.
Having some cash on hand is never a bad thing.
When it comes to the portion of your emergency fund you keep at home, I’d recommend just being reasonable.
If you’ve got $10,000 set aside for emergencies, I’m OK with you keeping $5,000 at home in a quality safe.
I wouldn’t put all, or even most of it, in a safe, though.
Again, just make sure your homeowners policy covers anything you might put in there. A strong, fireproof safe is a must!
— Dave
