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People with precious family heirlooms and documents that smoldered in safe deposit boxes within one of the still-standing World Trade Center buildings have learned a hard lesson.

Although the contents of a safe deposit box are secured inside a bank’s facilities, the items in the box are personal belongings and are not insured by the bank. Consumers need to insure those items on their own.

“It’s probably the largest misunderstanding there is out there,” said David McGuinn, founder of Safe Deposit Specialists and national consultant to banks for safe deposit operations. “The misunderstanding probably comes about because consumers feel that every type of service provided to them by a financial institution has at least $100,000 of government insurance,” he said, referring to coverage by the Federal Deposit Insurance Corp.It’s only storage spaceThe FDIC insures only deposits in deposit accounts at insured institutions. Safe deposit boxes are considered storage space provided by the bank and do not fall under the insurance laws, according to the government agency. Banks offer safe deposit boxes as a service to customers, but take no responsibility for what is inside.

“We really don’t want to know what’s in there. It’s your personal property,” said Jill Sandilla, Fifth Third Bank vice president and regional manager for Summit and Portage counties, Ohio. “We do not want to take any liability with those boxes.”

That’s why an employee will turn around or leave the room after a customer accesses a box, said McGuinn. There really are no laws specifying what can and cannot be held in a safe deposit box, he said. “If you’re breaking the law and using the box to break the law, a bank could have some exposure if they knew what was in there. If there’s no knowledge, there’s no reason to be responsible,” he said.

A more likely scenario and reason for protection for banks, though, is responsibility for lost or stolen items in a box, McGuinn said. “If I know there are 3,000 $100 bills in there and they disappear, I’m the first suspect,” he said.The key’s the keyMost banks have safe deposit boxes that will not open without two keys – the bank’s key and the individual’s key. “If a customer’s key is missing, we literally have to drill the box,” Sandilla said.

Even though his bank is not liable for the contents of safe deposit boxes, North Akron Savings Bank President Steve Hailer says he is moving away from that service. “I really don’t want that responsibility,” said Hailer, who added that the bank would continue to service its existing safe deposit box customers but is not renting boxes to new customers.

Hailer said his clients are not knocking down the door for that service. “It’s really a day gone by, for me,” he said.

However, Sandilla with Fifth Third and Karen Maruna with FirstMerit Bank said their banks are continually adding safe deposit boxes at many of their branches. “We still believe in them very much as a value-added service for our customers,” said Maruna, FirstMerit’s retail marketing manager.

McGuinn said a popular trend recently is to offer large boxes with doors and combination locks for larger items. A growing and disturbing trend among banks now is to go to something called self-service or self-entry safe deposit boxes, he said. No employee lets the customer into the vault and boxes can be opened with one key instead of two, said McGuinn.

Some banks have even taken the boxes out of bank vaults and placed them in the lobby. McGuinn warns against using these types of self-serve safe deposit boxes, which he calls the “bus locker concept.”

“Don’t call it safe. Give it another name. It’s not safe,” he said.

Another misconception among consumers, said McGuinn, is that vaults and safe deposit boxes are completely safe. Many are fire-resistant and water-resistant, but are not fireproof or waterproof, he said. While it’s a highly unusual set of circumstances, the virtual destruction of items in safe deposit boxes in a bank branch in 5 World Trade Center shows how items can be damaged, he said.

Though no flames actually engulfed the building – which was badly burned and damaged after the Sept. 11 attacks and remains standing – the intense heat from surrounding fires essentially made searing ovens of the boxes. (Customers there are now trying to hold the bank accountable for losses because its contracts, following state law, may have provided a loophole by saying the contents of the safe may not be fully protected under the bank’s insurance, McGuinn said.)

One of the largest losses in that New York fire were 40,000 negatives of John F. Kennedy belonging to the former president’s late personal photographer. The negatives, which were not insured, are estimated to be worth $2 million to $3 million.

Jeanne Salvatore, vice president for consumer affairs at the Insurance Information Institute, suggests consumers check with their insurance agent to find out what protection they have under existing policies of items placed in safe deposit boxes. Many homeowner insurance policies will put a monetary limit on how much is covered outside of the home or on jewelry. If a person has valuable items, it is worth looking into buying what’s called a floater or endorsement – additional insurance on specific items, she said. Items kept in safe deposit boxes are generally less expensive to insure because they’re in a relatively safe place, she said.

McGuinn discounts safes that many consumers buy at a retail store and use in their home. Ironically, the safe deposit expert decided he was sick of paying for a box at a local bank four years ago. So he went out and bought a 300-pound safe and put it in his home. Last January, his house was burglarized and the safe was opened with “crowbars and every type of tool” and McGuinn and his wife lost $50,000 in items.

McGuinn jokes that he no longer has anything valuable to put in a safe deposit box, but he now rents one again. That’s because a robbery is going to be less likely, he said. “First they have to penetrate a door that is two tons. Or a wall with heat sensors, motion detectors on the inside that have been activated. It would probably be 200 times more difficult to take things out of there than out of my house,” McGuinn said.

So what should you put into a safe deposit box? Anything that is considered valuable or not easy to replace, said McGuinn, who suggests putting items in plastic sandwich bags or plastic containers to lessen potential water damage.

He also suggests telling someone where you have the box. Keys do not identify the bank, and many banks will not confirm whether a person rents a box for security reasons.

But not everyone needs to rent a safe deposit box, McGuinn said. “If I don’t have anything I wouldn’t be afraid of losing, I don’t need a safe deposit box,” he said.

Copyright © 2002 Knight Ridder/Tribune Information Services. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

What to keep (and not keep) in a safe deposit box Here are some typical items that can be placed in a safe deposit box. Experts suggest keeping a separate inventory of the items in your box.Family records, such as birth certificates, marriage and death certificates.

A copy of your will, or the original, if you co-own the box with your spouse and have right of survivorship in the case of one spouse’s death.

Original deeds, titles, mortgages, leases and other contracts.

Stocks, bonds and certificates of deposit.

Insurance policies.

Photo negatives.

Items that SHOULD NOT be placed in a safe deposit box:

Anything you might need in case of an emergency when the bank is not open, such as power of attorney papers, passports, medical-care directives. Consider making copies for your box, but giving the originals to your attorney.– Source: FDIC

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