Safe-Deposit Box Contents Not Insured

Article excerpt

In the aftermath of Superstorm Sandy, holders of safe-deposit boxes should consider how safe the valuables they've got stowed away really are.

The boxes' contents are not really deposits, meaning they're not covered by the Federal Deposit Insurance Corp., which insures each depositor up to $250,000 per bank.

And the boxes are not always safe, as was shown by Hurricane Katrina and the Sept. 11, 2001, terrorist attacks. A number of bank vaults were flooded by Sandy's tidal surge, and thousands of bank customers are finding out that the boxes are vulnerable.

"All safe-deposit boxes are termed fire-resistant and water- resistant, but that does not mean they are completely immune to fire and flood," said Doug Johnson, vice president of risk management at the American Bankers Association.

Bankers are being tight-lipped about the extent of the storm damage, citing customer privacy concerns. They deny responsibility for lost or damaged contents, citing language in the leases that backs them.

Here is what the FDIC says about damage to safe-deposit box contents on a consumer news page at its website:

"Unless your bank is found to be negligent in the way it handled or protected your safe-deposit box, do not expect the bank or its private insurance to reimburse you for any damage or loss. …