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Question: Can you tell me whether or not there are state regulations requiring financial institutions to disclose the fact that safe deposit box contents are not insured?
Answer: A handful of states, such as Massachusetts, New Jersey and New York, do have statutes that require a disclosure informing a safe deposit box renter that the contents of their box is not insured by the financial institution. You will want to check with your local counsel to see what the law is in your state on this issue.
Aside from state law requirements, many now include in their safe deposit box leases language that informs the party renting the box that the contents of the safe deposit box are not insured by the institution or any government insurance program. This is being done more as a best practice to eliminate any confusion on the renter’s part regarding insurance of their property. It is virtually impossible for the financial institution to adequately insure against loss, since you have no idea what the contents of the box are. That is why it is important to explain during the lease signing process that insurance is not provided by the financial institution and to suggest that if extra security is needed, the renter should seek coverage through their home owner’s or renter’s insurance policy carrier. For your own protection, your lease should also disclaim your liability beyond your exercise of reasonable care and make clear that the fact that you do not insure the contents of the box does not constitute a failure to exercise reasonable care. (posted 4/17/06) |
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