As per RBI regulations, banks bear no responsibility for reimbursing losses incurred due to the damage or destruction of the contents within a safe deposit box.
In India, the concept of financial responsibility is frequently associated with maintaining a robust savings account or making prudent investments. Nevertheless, the secure storage of monetary assets is equally vital. Many individuals regard bank lockers as a highly dependable component of this secure storage framework, typically used for safeguarding valuables such as jewelry and critical documents. Nonetheless, a prevalent question among those who utilize these lockers pertains to whether the cash stored within them can be insured through money insurance or any other applicable policy.
A money insurance policy offers protection against the loss of monetary assets, which can encompass various forms, including coins, banknotes, currency notes, checks, postal orders, or even current postage stamps. This policy is designed to address specific scenarios:
The first situation pertains to the transportation of money from a bank to the insured location, intended for purposes such as paying wages, salaries, or petty cash.
The second situation involves money that is under the personal supervision of the insured or authorized employees while in transit from the insured location to a bank or Post Office. The insurance company extends coverage for this scenario within 48 hours of money collection.
The remaining two situations encompass instances when money is either present on the premises during working hours or securely stored within a locked safe or a secure room within the insured premises.
According to Gurdeep Singh Batra, who serves as the Head of Property Underwriting for Excess and Surplus, Risk Engineering, Global Accounts, and Coinsurance at Bajaj Allianz General Insurance, cash or monetary assets typically fall within the scope of a money insurance policy only when they are kept within insured premises and when other coverage options, such as protection against fire, burglary, theft, accidental damage, and similar risks, have been selected. Consequently, money stored in a bank vault is not typically covered by a dedicated money insurance policy. Nevertheless, he noted that in light of the revised guidelines issued by the Reserve Bank of India (RBI), banks are now obligated to provide safeguards against perils such as fire, theft, and structural collapses concerning their bank lockers. Their liability in these cases is generally capped at 100 times the annual rent for the locker.
Reiterating this point, Abhishek Bondia, who serves as the Principal Officer and Managing Director at SecureNow.in, explained, "While bank locker policies explicitly exclude coverage for cash or currency kept within the locker, money insurance, on the other hand, specifically pertains to the protection of money located within insured premises. In this context, 'premises' refers to locations like factories, shops, or offices."
In accordance with the current regulations established by the Reserve Bank of India (RBI), banks are absolved of any responsibility for the loss of items stored within their lockers. They bear no obligation to provide compensation for the destruction of contents, regardless of the cause, be it natural disasters like floods or earthquakes, or incidents such as theft. This may come as a surprise to many, but it's essential to recognize that when you lease a bank locker, you assume full responsibility for any associated risks.
So, what options are available when considering the insurance of cash stored in bank lockers? Unfortunately, a money insurance policy does not offer coverage for this specific risk. However, there are certain insurers that offer home insurance policies with extensions to encompass valuables such as jewelry, important assets, and documents stored in bank vaults. It's important to note that there are restrictions in terms of the maximum insured amount, which may not fully cover the total value of the stored items.
Naval Goel, the Founder and CEO of PolicyX.com, pointed out that some insurance policies do provide coverage for your valuable items stored in a bank's secure facility, but these typically include jewelry and important documents, excluding cash. For example, certain traditional home insurance policies cover jewelry and other valuable belongings both at home and in bank lockers, but they often have sub-limits. In such cases, the coverage for the locker's contents is typically limited to 20 percent of the total sum assured under the home insurance policy.
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