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Beware of holes in bank-box safety net
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Even people without safe-deposit boxes latch onto floater policies for valuable items because they carry no deductible and kick in for what agents term "mysterious disappearance." For instance, when Beery's wife lost the setting from a diamond ring in a schoolyard, the floater paid for its replacement. "But because this didn't involve theft, it wouldn't have been covered by our homeowners policy," he points out.

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Know, however, that if you do purchase this coverage for property that you keep at home instead of a more-secure safe deposit box, the premium cost more than doubles. And if you do keep, for example, pricey jewelry in a bank box, when you wear it on a special occasion, you must inform your agent that you've removed it from the vault and then cover it at the higher premium for the duration of the event.

"Most people don't want to bother with that, so they insure jewelry at least at the higher rate," Beery says.

Some insurance companies put limitations on a personal articles floater. Some won't write it for more than your homeowner's policy contents coverage. Others draw the line at 50 percent of that coverage. A rare few will write stand-alone floaters. Beery suggests consumers ask their agents for quotes with their current homeowner's insurer, and ask for alternatives if the price or terms seem out of whack with your needs.

Then there are considerations for covering documents stowed in a safe-deposit box. If your financial broker or 401(k) fund doesn't hold your stock and bond certificates in the street name, you'll need to take out a seven-year lost instrument bond for this safe-deposit box item. Plan to pay $20 per $1,000 of coverage for this coverage.

Opting for insurance only
So why bother with a safe-deposit box at all if you need all this extra insurance? That's a question many people are asking themselves.

"I don't think the average person has a safe deposit box any more. I don't and my dad was a banker," Beery confesses. "These days, people rely heavily on insurance to take care of valuable things."

Technology also offers new security options. Companies like XDrive.com provide digital safety boxes. The service stores and manages your files, securing everything with 128-bit encryption. The advantage to this kind of Web-based storage option is the accessibility. The fact that you can look at any necessary paperwork from anywhere, as well as granting access to whomever you wish, could be more convenient than just backing everything up on a removable hard drive and chucking the whole thing into a fireproof box. The disadvantage is that these companies go out of business all the time, as with brick and mortar companies, it's important to check into the solvency of the company to which you're entrusting vital information.

"While I can see the need to insure the value of physical belongings in a safe-deposit box, I question both the possibility and usefulness of insuring documents and memories," says Mnemopolis.com representative Yves Caron. Basically, Caron adds, his company is insurance.

Finally, if you do decide a safe-deposit box is your best security move, don't skip common-sense protection steps. McGuinn says to store documents within airtight, zip-lock or Tupperware-style containers inside the box. Stash copies of important documents in a separate location and photograph the vault's contents.

Anything you do to increase chances of successfully identifying, claiming or recovering an item is worth the effort.

Julie Sturgeon is a freelance writer based in Indiana.

Bankrate.com's corrections policy -- Posted: May 8, 2006
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