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(Un) Safe Deposit Boxes

BLOG, ESTATE PLANNING, PERSONAL FINANCE  |  11 Sep 2019

Is That Bank Box Really Secure?

By Jon Aldrich

Safe Deposit Boxes

You probably consider a bank safe deposit box as a safe, secure place to store some of your precious valuables such as jewelry, watches, coins or important documents. You might want to re-evaluate that notion. Imagine walking into your local bank to access your trusty safe deposit box so you can take a gander at your priceless watch collection or marvel at some rare coins from hundreds of years ago. You take out your special key and the bank employee inserts their key to open the box. You wait with anticipation to view your treasures, but when the lid is opened, all you see is the stainless steel of an empty box! Houston, we have a problem!

That is exactly what happened to a gentlemen in New York named Philip Poniz (not Ponzi) according to this New York Times article. (side note, it is well worth registering for the free online access to get a handful of NYT articles each month). Mr. Poniz walked into his local Wells Fargo branch in 2014 and discovered that several million dollars of rare watches that were in his safe deposit box for years had disappeared due to a bank mix up. I know, I know, Wells Fargo could never do that, right?

Apparently, Wells Fargo had tried to evict another customer that was delinquent in payments and inadvertently removed Mr. Poniz’s box instead. The bank shipped the contents to a storage facility out of state but when Mr. Poniz discovered the loss, they shipped the items back, but in the process several items vanished. These several items (rare watches and coins) just happened to be worth several million dollars.

FDIC insurance does not cover items in a safe deposit box and banks are going to do whatever they can to avoid any responsibility for lost items contained in safe deposit boxes. The article goes on to list several other cases of people reporting items missing and really just being out of luck as the bank’s contracts for the deposit boxes generally let them off with only minor responsibility. No rules regulate banks to require them to compensate you in the event of lost or stolen items from a safe deposit box. Even going to court has proved fruitless for many and Mr. Poniz is still battling Wells Fargo in the legal system and the case is still far from resolution. Bryan Hubbard a spokesman for the Office of the Comptroller of Currency stated in the NYT article that there are not any specific provisions of banking law that expressly regulates safe deposit boxes,

What Can You Do to Protect Valuables?

There are a few things that you can do. One would be to make sure your items are inventoried and insured. You may need a specific rider from your insurance company on top of your standard homeowners coverage to adequately cover valuables and there are also specialty carriers that provide insurance for articles in safe deposit boxes. One such company, Safe Deposit Insurance Company is located right down the road in Elgin. Mr. Poniz did not have insurance because the cost for insuring the millions of dollars of watches was prohibitive he said. I would think if you had that kind of collection, you might be able to find a way to insure them somehow.

If you have some valuable items that you will be putting into a box you will likely need to “schedule” the items which means providing original receipts or appraisals that are up to date. You will also want to have photos kept somewhere safe (besides the deposit box) in case you do need to file a claim.

Another option is a high quality, fire-proof safe that is bolted to the floor. A good choice may be a large, heavy duty gun safe. They are great for holding items other than guns and a large heavy one can hold a lot of items securely.  A quality safe from a company like Sentry or Browning can be a solid choice. If you really don’t want a large, bulky safe in your residence, you can also get much smaller safes that might fit the bill, and there is a good review of these here.

Things to Not Keep In A Safe Deposit Box

OK, say you still think you need to keep valuables in a safe deposit box. Here are some things you may NOT want to keep in there:

  • Jewelry and rare watches (obviously from reading the above)
  • Original Copy of Wills or Trusts – After death, the bank will seal the safe deposit box until the executor or trustee can prove legal right to access it. This can take additional time and hold things up. Better to keep with your attorney or financial advisor or a home safe.
  • Power of Attorney or Advance Directives – same reason as the will or trust, plus with banks not being open on nights, holidays or weekends, you may need to access these at hours the bank is not open.
  • Spare keys – If you get locked out of your house or lose your keys, there is a good chance the safe deposit key is either with the lost keys or somewhere inside the house. Consider keyless entry or leaving the key with a trusted neighbor instead.

Keeping your valuables secure is important, but also make sure you take steps to ensure that your items are truly secure (or at least insured adequately). Also remember that FDIC insurance only applies to your cash on deposit, not your valuables stored at a bank.