From collecting fine art and jewelry to relaxing at a luxury cottage you own, there are many ways to enjoy the finer things in life. If this sounds like you, safeguarding your wealth and protecting what you enjoy because of it is undoubtedly a top priority. How you do this depends on what part of your wealth you’re looking to safeguard. If you have a luxury cottage, for instance, you may wish to protect it with cottage insurance.
For items like fine jewelry or other collectibles, a safety deposit box can be a valuable tool for protecting your precious valuables. Here's what you should know about this important safeguard.
What can you store in a safety deposit box?
A safety deposit box is an ideal storage solution for items that hold significant monetary or sentimental value. Here are some key examples:
- Fine jewelry and precious metals
- Collectibles, such as rare coins, antiques, and one-of-a-kind pieces
- Important legal documents like property deeds, trust agreements, and wills
- Rare assets such as gold coins, vintage watches, or other tangible investments
However, not everything belongs in a deposit box. For instance, anything you may need quickly is best kept in a readily accessible, yet secure location. This includes your passport and any healthcare directives. These boxes are also not appropriate for storing cash. Artwork, due to its size, is often best suited for storage in a temperature-controlled unit.
Best practices for managing access
Reputable banks will have robust security measures for all their operations, including safety deposit boxes. This can include camera monitoring systems, storage in a bank vault, and the presence of security guards. However, the physical security of your safety deposit box also extends to how you manage its access. Here are key practices to maintain:
- Store the key in a discreet, secure location, free from any identifiable markings
- Only share how to access the box or what is inside it with trusted individuals. This includes those who are part of your estate planning
- Maintain a detailed record of the box’s contents, securely stored in your home or office
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How your home insurance can help protect your security deposit box contents
While Canadian banks and financial institutions provide robust security measures for physically securing safety deposit boxes, they typically don’t insure against losses stemming from the contents of the box. Therefore, ensure that any items stored in your safety deposit box are listed as part of your home insurance policy. This way, your listed valuables will be protected against the same insured risks as those covered by your home insurance policy, such as fire and theft.
In the vault or out of the vault
When scheduling items, such as jewelry, on your home insurance policy, they will be listed as either in the vault or out of the vault. Any piece of jewelry you store in a security deposit box at a bank will be listed as in the vault in your home policy.
While policies can offer reduced rates for stored pieces, they often limit access. For instance, you may only be allowed to remove a piece of jewelry a limited number of times a year to maintain your coverage. Additionally, you may only be able to keep the piece out for a short time, such as two to three weeks. Both the number of times and how long you can have the piece out of your safety deposit box varies depending on the insurance carrier.
It’s also worth noting that you may need an endorsement or rider if you’re adding jewelry above your home insurance policy limit.
Keep a record
When you have a safety deposit box, it’s essential to maintain both a personal record of its contents and its insurable value to ensure your policy provides the level of protection you require. Proper record keeping includes conducting professional appraisals every 5 to 10 years for fine jewelry and high-value collectibles you’re storing in your safety deposit box.
Next steps
Protecting high-value assets isn't just about practicality—it's a vital component of a comprehensive wealth preservation strategy. It’s about protecting what matters most to you. When you accurately include vault items in your home insurance policy, you can ensure that your treasures stored in your safety deposit box remain protected. You can initiate the process by speaking with an experienced insurance broker, such as Cowan Private Client. Our team of experts possesses the wealth of knowledge necessary to help build insurance solutions tailored to your unique needs and risk tolerance.
