Include bank locker in home insurance

Since banks won't compensate customers for loss of goods in locker, onus is on you to safeguard them

Finance Minister Arun Jaitley recently informed the Rajya Sabha that banks are not liable to compensate customers, in case goods in the lockers are lost due to theft burglary or a natural calamity. At the same time, Minister of State for Finance Santosh Kumar Gangwar said that nearly Rs 180 crore was lost in 2,632 cases of robbery, theft, dacoity and burglaries at 51 banks in the past three years (2014-15 to 2016-17).

“As banks don’t ask you for contents of the locker, they are not responsible for its loss. The relationship between the two is like landlord and tenant. The landlord is not responsible for theft inside the house of a tenant,” says Atrey Bhardwaj, head, general insurance at BankBazaar. He suggests, “It’s, therefore, necessary for the individuals to look for options that protect their belongings.”

One option is to go for a home insurance policy that also covers valuables kept inside the bank locker. But be sure to understand the caveats in these policies. These plans cover only valuables such as precious metal jewellery (including watches), diamonds, work of art and curios. If you have important papers or cash or any other valuables, there’s no insurance available.

For valuables below a certain limit, the insurer may ask you to give a self-declaration on the market value of the bank locker content. Insurers allow self-declaration as there could be jewellery that’s passed from one generation to the other and customers may not have bills for it. In Bajaj Allianz’s My Home Insurance All Risk Policy, for example, the limit is Rs 10 lakh. If the market value of your goods crosses the threshold, you need to get a valuation certificate from a recognised valuer compulsorily. The premium cost for the jewellery and valuables depends on the proposed value for insurance. If sum insured for jewellery and other valuables is Rs 5 lakh, the premium payable would be Rs 4,000 for India and Rs 5,000 for worldwide. Taxes will be extra.

When insuring your valuables, it always better to get valuation certificate from an insurance company-approved valuer, irrespective of the value of your belongings. It will help in case of claims. “In case of contents that come with a certificate, the insured can get full value if there’s a total loss,” says R Suresh Nair, head-product development, Bajaj Allianz General Insurance.

If you give a self-declaration, the insurance premium would vary, depending on how the price of the gold or diamond changes every year. In case of valuation certificate, the premiums remain constant.

Some insurers also put sub-limits. The maximum cover may be, say 25 per cent of the total sum insured. It means if the contents cover for all home insurance product (including gadgets, home appliances, etc) is Rs 5 lakh, jewellery worth only Rs 1.25 lakh will be covered.

If you have limited things to take care of, one option is to go for a safety vault inside your own house. Safety vaults come in many options depending on your need. They can be anchored to the wall or fitted into the flooring and are available at a one-time cost of Rs 8,000-50,000.