A lot of families keep their jewellery, important documents and other valuables in a bank locker to ensure their safety. However, banks do not take any liability for loss or damage of contents kept in a locker.
So how do you ensure the safety of your valuables? One way is to buy a home insurance policy that covers bank lockers. But recently Iffco Tokio General Insurance Co. has launched a cover, Bank Locker Protector Policy, for bank lockers exclusively. Let’s take a look at what it offers and if it makes sense to buy it.
What’s on offer?
Traditional home policies cover jewellery and other valuables kept in the house, but some of them cover bank lockers as well. “But, there are sub-limits. Usually the locker cover in such cases is only up to 20% of the total sum assured under the home insurance," said Rakesh Goyal, director, Probus Insurance Brokers, an insurance broking firm.
The cover: The Iffco Tokio policy covers the bank locker against various risks, including fire, earthquake, burglary, cheating by a bank staff or any act of terrorism.
Subrata Mondal, executive vice-president, underwriting, Iffco Tokio General Insurance, said that any valuables like jewellery, antique watches or electronic items that can be kept inside a bank locker and are declared can be covered. However, the policy doesn’t cover cash kept in lockers. “For small value items, a declaration will be sufficient. But if any single item is valued at over Rs.10 lakh and if the overall value of the items in the locker exceeds Rs. 40 lakh, then we will request for a valuation certificate for the contents of the locker," Mondal said. The cost of the valuation, which is usually around 1% of the value of the item, will have to be borne by the consumer.
Apart from insuring jewellery and valuables, you can insure important documents by taking an add-on cover.
The cost: You need to pay a premium of Rs. 300 for a cover of Rs. 3 lakh, which goes up to Rs. 2,500 (plus goods and services tax) for a cover of Rs. 40 lakh. Above Rs. 40 lakh, Rs. 0.6 will be added to the premium if you enhance the cover by Rs. 1,000. This comes to Rs. 600 for a cover of Rs. 10 lakh.
Documentation: At present the policy can be bought only offline through the company’s distribution channels and bank partners. Besides the insurance proposal form, you will need to provide a declaration having the details of the locker and its contents along with a valuation certificate.
Making a claim
Providing the declaration is enough at the time of buying the policy, but at the time of making a claim, you will have to submit documents to prove that you indeed hold a locker at a particular bank branch.
Also, you can make a claim only if the bank acknowledges a robbery or loss, and files an FIR with the police. If you, as a consumer, lodge an FIR but the bank does not acknowledge the loss and does not file an FIR, the claim will not be entertained. “That is because the bank is the primary owner of a locker. Then there will be an investigation from the insurance company and a police inquiry into the matter. Only then will the actual loss be determined. Except for the requirement that the bank files an FIR, the other procedures are the same as in any policy, including home insurance, that covers burglary," said Mondal.
Should you buy?
Many people prefer keeping their valuables in a bank locker as they find them safer than their homes. “Someone having a bank locker should consider buying this policy. Moreover, the premium in this policy is very low. Also, only a few people have home insurance, and even in home insurance, usually, the claims process is not very smooth," Goyal said.
However, another view is to stick with home insurance that also covers your valuables. If you do not own a house, you can look for a renter’s insurance, said Kapil Mehta, founder and CEO, SecureNow Insurance Broker. “When we talk of jewellery in particular, the order of priority for insurance should be the one kept at home, then the one being used to wear and the third and last priority should be the jewellery in a bank locker," he said.