With the onslaught of the latest economic news, more people may be moving to use bank or home safe deposit boxes for storing their liquidated cash and other valuables. Are they absolutely, positively safe there? Not necessarily. Jewels, gold, stock certificates, annuities, deeds of trust, coins, stamps, cash; many people mistakenly assume that these items are covered by the Federal Deposit Insurance Corp.’s guarantee or their homeowner’s insurance. The FDIC’s $100,000 guarantee, however, does not extend to cash in safe deposit boxes. And, to many homeowners’ chagrin, their personal policies may not cover cash or contents, either. Be sure to check your homeowner’s or your renter’s policy to see if a safety deposit box is covered: if not, you may have to purchase additional coverage.

A recent article in Marketwatch points out that contents of safe-deposit boxes can be destroyed, as they were during the World Trade Center attack. Hurricane Katrina wiped out some 250 vaults, said Margot Mohsberg, spokeswoman for the American Bankers Association. The article provides these excellent tips for potential users of safe deposit boxes, as follows:

• Be sure your homeowners insurance covers safe deposit box valuables, even if it means paying an added premium.

• Put valuable contents in sealed plastic bags and photograph them. Also, get appraisals of valuables and keep receipts. Although banks typically are not liable for contents lost in a disaster or terrorist attack, they often try to work with customers, Oliva said.

• Make sure your heirs know you have a safe deposit box. Otherwise, when you die, contents could revert to the state.

• Be very specific about safe deposit box access in your power of attorney documents.

• Avoid storing in the box original documents you might need to access immediately, such as a power of attorney, passports, medical-care directives, funeral instructions and, depending upon your state, a will.

• Read the contract for your box carefully. Also, Mohsberg suggests, appoint two lessees to ensure accessibility.

• Understand that it’s the concrete bank building and vault that protect your box contents in disasters, not individual boxes, Benore said. Vaults are fireproof, but not waterproof. So if you’re in a flood-prone area, choose a box located high in the vault.

• A risk with a virtual safe deposit box is a computer crash. Also, original or certified documents may be required for certain transactions. So always have your attorney certify several copies of legal documents and keep those accessible.

The safe deposit boxes located at banks and credit unions do offer added security not available in most homes. But nothing is fail-safe;  in the event of fire, even if the flames do not penetrate the box, the heat alone can turn papers to ash and melt precious metals. Most boxes are not capable of withstanding a significant flood of any magnitude, and most homeowners’ policies exempt this act of Mother Nature.

The bottom line is, think carefully and prudently and do your research before you decide to commit your valuables or hard-earned cash to a safe deposit box.

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