Why Your Safe-Deposit Box Isn’t Really Safe

Posted on 14. Mar, 2006 by Jason Guthrie in Saving & Investing

The Wall Street Journal has this occasional piece they like to call “Ask Personal Journal” and I thought this week’s question was interesting and something I would never have thought about.

Q: Does a bank have any responsibility for items in a safe-deposit box that are later damaged by a natural disaster or stolen?

A: Unless the bank is found to be negligent in the way it handled your safe-deposit box, it cannot be held liable for any items damaged in a natural disaster or stolen, says Dave McGuinn, president of Safe Deposit Specialists in Houston. The Federal Deposit Insurance Corp. insures deposits in deposit accounts at insured institutions. Since banks have no idea of what is in the box, they can’t insure those items, Mr. McGuinn says. Check whether your homeowner’s or renter’s insurance policy covers the items and what you can do to insure them. If your home policy doesn’t provide enough coverage, you may be able to buy “floater” policies to insure the safe-deposit items, says Jeanne Salvatore of the Insurance Information Institute.

Moral of the story: Your safe-deposit box is only as safe as the amount of insurance you have protecting it.