By: Jason Markum

I’ve got a safe deposit box. I don’t know you, but I’m guessing that YOU have a safe deposit box too! At least, if you’ve got any brains in your head you do! In this day and age, with identity theft such a growth industry, it’s more important than ever to keep all your important documents in a safe deposit box.

And of course, it’s always a good idea to keep other valuables besides important documents, I’m talking about jewelry, rare coins, gold bars, diamonds, etc in a safety deposit box. Or is it?

Just how safe IS your safe deposit box? Sure, it’s in a bank….but banks get robbed all the time. Sometimes robbers go straight to the deposit boxes because they know that’s where the good stuff is. After all, it’s hard to walk out of a bank with huge bags of cash (those things are incredibly heavy!), but if they can walk out with a handful of diamonds that may be worth millions of dollars…well, you get the idea.

And you don’t just have to worry about theft…there’s always a threat of fire, flood, earthquake, alien invasion…well okay, strike that last one. But natural disasters do occur, and banks are not immune to these things.

So what can you do to make sure that your safe deposit box is…well…safe?

The most important thing you can do is to buy insurance for the contents of your box. Some banks offer a minimum level of insurance with the box (ask your banker to be sure) but this will not likely cover all the contents of your box, especially if you have high worth items.

Some people use private safety deposit box companies instead of banks. Generally speaking, these companies usually offer a little more in insurance for new depositors. Check to see with your specific box company what the general levels are.

Some things aren’t cover-able by insurance. Things like stock certificates, for instance, fall into this category. In that case, I suggest you leave your stock certificates on file with your brokerage company as they are well endowed to handle these sorts of things. Your brokerage firm has a legal obligation to safeguard your certificates that is probably more compelling than a banks safe deposit obligations.

One solution (well a SORT of solution) is to keep multiple safe deposit boxes at multiple banks in multiple towns. You don’t want to keep multiple boxes at the same bank, because if a fire hits, all the boxes will get destroyed equally.

And you don’t want to keep multiple boxes at banks that are close to each other, because if a earthquake or flood hits, chances are all the banks in your area could be hit. I suggest keeping two or three boxes in several towns, each within about an hour driving distance.

An hour is far enough away so that a natural disaster of some sort would likely miss each bank, yet not too far away that you can’t get there in an hour or so. Another solution is to open a box in the city where you usually vacation, or one in which you travel to often for business.

Keeping your safe deposit box safe is a tricky matter. However you end up solving this little dilemma, as long as you know this potential problem exists, you are already way ahead of the game. I suggest you use a combination of insurance for the high-worth items and diversification for all the others.