By Richard Newman, The Record (Hackensack, N.J.) –
In the wake 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-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 up.
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 … check whether your homeowners’ or tenant’s insurance policy will cover it.”
The FDIC advises that documents, jewelry and other contents be sealed in Ziploc bags or Tupperware. Also, put your name on each item, keep a list of the box’s contents, and make copies of important documents. If a disaster occurs, these steps improve your chances of recovering an item.
Timothy E. Mackey, fidelity bond claim director for property and casualty insurer CNA Financial in Cranbury, N.J., says safe-deposit boxes affected by Sandy probably number in the thousands, and in certain cases, the bank’s insurance will cover damage to contents.
“The process can often take a long time to resolve because banks have a difficult time reaching box holders who have been displaced,” he said.
Chase spokeswoman Melissa Shuffield said last week that about 1,000 boxes that were in “a handful” of Chase branches, were affected by flooding, and customers are being invited to come open the boxes to assess the damage.
“About half of the customers have come in and we are continuing to make calls,” she said. “We are working with customers on a case-by-case basis to see where we are able to help,” she said.