To some people, a safe deposit or safety deposit box can seem like the most secure place in the world to keep your valuables. This statement can be considered true, especially if the box is insured. For anyone who doesn’t know, a safety deposit box is a designated box/container stored inside a vault or safe at a federally insured financial institution.
Each person will receive their own assigned box which generally has two keys. One key is given to you the box owner, and the other is secured within the financial institution. For added security, it generally takes both keys used in tandem to open the box at any given time. Some institutions have a key-less option, which usually utilizes some form of biometrics, such as fingerprint scans, for access.
A safety deposit box is typically used for important documents or important items that are not needed often, but have a very high value. This value can be monetary, functional, or sentimental. Here are the answers to commonly asked questions when considering safety deposit box insurance.
Do I need safe deposit box insurance?
People are often under the impression that their safe deposit box at their bank is automatically insured by the Federal Deposit Insurance Corporation (FDIC). However, the FDIC only covers account deposits and financial institutions do not accept responsibility for any risk or loss regarding the contents of your safe box.
As a matter of fact, if you thoroughly check the rental agreement for your box, you will most likely find a clause that tells you as much. It will state in no uncertain terms that the bank’s insurance does not protect the contents of your box against loss. It will also highlight that your box is not fully protected from damage, theft, flood, or fire. Some will even go as far as to recommend that you get specific insurance for the contents of your safe box. So in short, yes, having insurance for your safety deposit box is generally a good idea.
What are the odds of me losing the contents of my safe deposit box?
While a safety deposit box is still the best option for storing certain valuables, the method is not foolproof against disasters, whether natural or man-made. You may actually be surprised to learn that the average number of bank robberies and burglaries per year is more than 5,000 across the country. If that wasn’t bad enough, there is also the chance of a fire, which may not directly reach the contents of your box, but may still be damaged by immense heat. There is also the chance of flooding from storms or hurricanes, tornadoes in some areas, and/or mudslides in others. Simply put, you do not want to leave your valuable possessions to chance.
What if my stored items do not have a monetary value?
It is true that some commonly stored items do not have a monetary value, but that doesn’t mean that they are not valuables. For instance, your deposit box could be home to your deeds, titles, status documents, etc. The policy will provide coverage for these important documents up to a specific amount. This money can be used to obtain replacements for these documents and may even allow you to expedite the process.
Where can I get safety deposit box insurance?
Safety deposit box insurance may not have been common in the past and as such, you may not be aware of where or how to get one. However, most financial institutions are now making it possible for their clients to obtain safety deposit box insurance without any hassle. However, if your financial institution does not yet offer that guidance, you can still easily get coverage straight from the Safe Deposit Box Insurance Company (SDBIC).
The SDBIC holds a patent for providing insurance for your valuables without knowing exactly what they are. This means you are not required to have any appraisals done and you do not need to disclose the contents. Aside from covering tangible assets, the SDBIC also provides insurance for digital assets, so you can also insure your information as well. The best part is, you get to choose your coverage limit which can range from as little as $25 to as much as $5,000. This also determines your annual premium.
How secure and private is the information I provide to SDBIC?
The first thing to note is that the SDBIC limits the amount of information that they require from you in order to offer you coverage. They also do not report your coverage selection to any agency besides their top insurance company, which is responsible for underwriting the limits. If a loss does occur, the details of that loss or any subsequent payouts are not reported to any state or federal agencies.
Can I update the items in my box if my policy is already generated?
So you have decided on a coverage amount for the items in your box, but later you acquired more valuables and would like to add them. That is absolutely fine. The fact is, your insurance covers everything in your safety deposit box that belongs to you legally. So even if you add items to the box after your coverage was already in place, it will still be covered within your selected coverage limit if something happens. However, if the added items increases the value of your overall content beyond your coverage limit, you should consider increasing your limit as well. This is to ensure that the payout is sufficient to cover the value of all your items if something does happen.
What’s the cost of insurance and how much should I insure for?
The good thing about insuring your safety deposit box is that you get to determine how much the cost will be. The cost will basically be determined by the coverage limit that you choose. Once you choose your coverage limit between $25 and $5,000, you will be able to determine the associated cost of the premium by checking out their pricing. This method makes obtaining safety deposit box insurance an economic option. Additionally, there is no out-of-pocket cost if a loss occurs because there is no deductible.
To determine your coverage limit, you should gather or list the items that you plan to store inside the safety deposit box, then come up with a reasonable estimate of their combined value. If some or all of the items’ value can increase over time, such as gold, silver, etc., you also should take that into consideration when determining your estimate. You can also increase your coverage over time as the value of the items increase. This is important, because you do not want to be under-insured if a loss should occur.
If you are looking for a secure place to store your hard drives or other valuables, Safe Deposit Center can help. At Safe Deposit Center, we offer a variety of safe deposit box sizes as well as open vault storage to accommodate your secure storage needs. For more information about our secure, private storage facility please visit https://safedepositcenterwa.com/.