Should You Insure Your Jewellery or Keep It in a Bank Locker?

With their perceived safety, bank lockers remain a popular choice for storing cash, documents, and valuables, including jewellery. However, in cases of theft, fire, or robbery, holding banks liable for the loss of valuables can be difficult, prompting many to consider whether insuring their jewellery might be a better option.

According to industry experts, bank lockers deliver robust physical security which makes them perfect for protecting valuable items such as jewellery as well as property documents and heirlooms. Banks maintain RBI-defined security standards through implementation of two-lock mechanisms, installation of surveillance systems and regulated entry procedures. However, bank lockers do not come with insurance for the contents. You need to buy separate jewellery or valuables insurance to protect against loss, theft, or damage.

“In the Bank Locker policy, the bank does not know what is kept in a locker, so the bank gets the insurance done as per RBI guidelines, which is a maximum of 100 times the locker rent,” says Amarnath Saxena, CTO-Commercial, Bajaj Allianz General Insurance.

On the other hand, a home insurance policy with content coverage provides financial protection for valuables kept at home. Some policies even offer limited coverage for items stored in bank lockers or during travel.

There are, in fact, several ways to protect your jewellery. The first step is to identify what kind of coverage you are looking for. If you simply want to be sure that your jewellery is safe in a bank locker, then a bank locker cover would do.

However, “if you want a comprehensive coverage for all your high-value jewellery for all times, then you may want to check a stand-alone cover. Similarly, if your jewellery is only a part of the valuables you wish to insure, then a home content insurance would provide you the most comprehensive coverage. So, identify your requirements and then look for an insurance plan,” says Adhil Shetty, CEO, BankBazaar.com.

If you habitually store your jewellery in the bank locker, then you can consider a bank locker insurance. The premium rates are much lower than home content insurance. Moreover, valuation is required only above a certain threshold, say, if individual pieces are worth more than Rs 10 lakh or the value of the jewellery exceeds Rs 40 lakh.

Home insurance policies typically provide coverage for house contents clothes, money and jewellery, furniture and electrical items and even fixtures and curtains, depending on the plan. However, it is a complete package and there may be only limited coverage for jewellery.

Most players consider jewellery as part of the home contents and apply a sub-limit to how much jewellery can be covered under the policy. Typically, it would be 25 to 30 per cent, though this may vary from insurer to insurer. So, if you have opted for a Rs 50 lakh policy, then only 25 per cent or jewellery worth Rs 12.5 lakh would be covered under the policy.

“Although it would cover your jewellery even if it has been stolen while you are wearing or transporting it or even if it is in the bank, you would need to prove that there has been no negligence from your end. For instance, if the house has been unoccupied for more than 30 days, during which the theft or burglary took place, then the claim may be rejected,” informs Shetty.

Jewellery insurance plans offer coverage from loss, theft, and damage of jewellery. Some of these insurances provide 100 per cent coverage, i.e., you can get up to 100 per cent of the cost of the jewellery items insured.

Depending on the cover, they also offer protection for a wide range of situations, including if they are stolen when at home, bank locker, or exhibitions, or even while they are worn. Jewellery insurance also requires you to get your jewellery valued first. The premiums typically tend to depend on the sum assured.