FEATURE — It was like something out of a classic heist movie.
In 2018, shortly after midnight, thieves cut a hole in the Woodforest National Bank’s roof in Conroe, Texas, lowered themselves into the vault below and began emptying the contents of dozens of safe deposit boxes.
Bank customers lost thousands of dollars in cash, collectibles and jewelry. Sadly, it was not the first time criminals had picked a bank’s safe deposit customers clean. Just two years before in the Conroe heist, several East Coast banks had also experienced a rash of similar vault break-ins.
There are nearly 25 million safe deposit boxes in the United States. Although they operate within the highly regulated banking industry, safe deposit boxes have no federal laws protecting those who rent them and no requirements that banks compensate customers for lost or stolen items.
You might think that because it’s called a “safe” deposit box, banks would have insurance to reimburse their clients in the event of a theft or loss. Unfortunately, safe deposit boxes are not always that safe.
Even if the bank is clearly at fault, it can be next to impossible to recover what was lost. When a bank does offer compensation, it can be a fraction of what a client has lost.
One reason it is hard to get banks to pay you is many of them have box-leasing agreements containing fine print. The fine print allows them to avoid paying claims when valuables are stolen or damaged. Another reason is that many banks consider safe deposit boxes to be a quaint relic of the past.
Safe deposit boxes are no longer profit centers for banks and are not considered a high priority item. That is why security for safe deposit vaults is somewhat lax, and record keeping can be sloppy. Each year, hundreds of bank customers report having valuables removed from their safe deposit boxes or find them accidentally rented out to other people.
Accessibility: another issue for safe deposit boxes
In addition to their attractiveness to criminals, safe deposit boxes suffer from another serious drawback: You cannot retrieve your valuables when the bank isn’t open. Or if your bank branch closes, it could take a long time for the bank to transfer your box to another unit.
The lack of easy accessibility is an excellent reason to avoid putting cash into your safe deposit box. Emergencies tend to occur at the most inconvenient times. If you need your money in a hurry, you may not be able to access it.
So should you get rid of a safe deposit box if you have one?
The potential risks of a safe deposit box may tempt you to get rid of yours. But don’t be so quick to turn in your keys. While you might not want to put cash and other items to which you need fast access in a safety deposit box, they can still be a great place to store certain items.
For example, security experts say that storing your Social Security card in a safe deposit box is not a bad idea. Most of you know that it is a terrible idea to put your card in your wallet. However, since you rarely need to physically produce your card, storing it in a safe deposit box or fireproof safe is an excellent idea.
Other things that might warrant storing in a safe deposit box are collectibles, jewelry you don’t use every day, computer thumb drives containing important information such as passwords and copies of receipts. You may also want to include registrations for automobiles and boats, title deeds, property surveys, birth, marriage, divorce paperwork, stock and bond certificates and photos.
It’s always a good idea to scan old photos and documents first and then store the scans in the cloud or on a removable drive.
If you choose to place collectibles in your box, be sure to check with your property/casualty insurance agent to see if such items have adequate amounts of renter’s or homeowner’s insurance. Standard policy limits are typically low, so ask your agent about getting additional coverage if you have many rare items to store.
Summing it up
Don’t let the “safe” in safe deposit box lull you into a false sense of security. Losses can and do happen. If you rent a safe deposit box, it’s probably not a good idea to put cash or anything to which you may need instant access. Instead, use it to store important documents that you rarely need to show or sentimental items you seldom use.
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