Do you insure your Gold?

Discussion of the Gold portion of the Permanent Portfolio

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Do you insure your "physical" Gold bullion bars and/or coins that are in your possession?

Yes, I already do
5
6%
No, but I am going to
13
16%
No, and I don't plan on it
38
47%
I do not have any physical Gold bullion bars or coins in my possession
25
31%
 
Total votes: 81
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MediumTex
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Re: Do you insure your Gold?

Post by MediumTex » Sun Jan 02, 2011 1:20 pm

I wonder how many gold coins stored in U.S. safe deposit boxes has been lost to theft in recent years.

I don't know how such a loss would occur.

I see them cracking safe deposit boxes in the movies, but the reality seems to be that most bank robberies are much less sophisticated operations.

Does the coverage include losses from government confiscation?  8)

If you want something else to worry about, read the force majeure provisions in your policy. 
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Re: Do you insure your Gold?

Post by Gumby » Fri Jan 07, 2011 1:37 pm

MediumTex wrote:Does the coverage include losses from government confiscation?  8)
No, they are very clear on that point. I am posting the sample policy they sent me with the quote if anyone wants to see what types of losses are covered and what isn't covered: Sample Bullion Insurance Policy (PDF)

Apparently "shrinkage" isn't covered under the policy either :P
KevD wrote: Interesting article:

Are Bank Safe Deposit Boxes Safe? No

http://www.marketoracle.co.uk/Article14722.html
Nothing is truly "safe." I suppose one easy way to measure the difference in risk between your home and your bank is to get a quote for insuring only at your bank and another quote for only insuring at your home. They will likely ask you for detailed information about both locations. My guess is that, for most people (with wood-frame house construction), the quote for insuring bullion in a home will be higher than the bank. If so, that would suggest that a home is riskier place to store gold in terms of raw measurable risk.

It's worth noting that many states have reduced their abandoned property limits from 15 years to 3 years for the reasons mentioned in the ABC News article mentioned in that link. This means you need to be more diligent about keeping your safe deposit boxes active as much as possible to avoid it being confused as abandoned property. Talk to your bank about how they determine what's abandoned and what isn't. My bank says they put red stickers on boxes that haven't paid their annual dues, and require customers with overdue bills to settle their rental balance before they can access their boxes again. If enough time passes, the boxes officially become abandoned and are handed over to the state. If you visit your box regularly each year, you should be ok.

I believe it also helps to have a piece of paper with up-to-date contact information inside of the box.
Last edited by Gumby on Fri Jan 07, 2011 3:23 pm, edited 1 time in total.
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Re: Do you insure your Gold?

Post by AdamA » Wed Mar 16, 2011 1:07 am

Rookie question--

How do the insurance companies value your coins?  For example, if I buy a 1 oz American Eagle today, it's worth about $1450.  Say it gets stolen 5 years from now and is worth $2000.  How much do I get?
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Re: Do you insure your Gold?

Post by Gumby » Wed Mar 16, 2011 9:32 am

Adam1226 wrote: Rookie question--

How do the insurance companies value your coins?  For example, if I buy a 1 oz American Eagle today, it's worth about $1450.  Say it gets stolen 5 years from now and is worth $2000.  How much do I get?
You are responsible for calling up your insurance broker whenever you want to revalue the coins. So, if a few months go by and you see that gold is up 20%, you just call them up and tell them what the new value is that the coins should be insured for. Keep in mind that your premiums will be adjusted for the new value.
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Re: Do you insure your Gold?

Post by flyingpylon » Mon Feb 20, 2012 8:45 pm

Just wanted to add some info here... Hugh Wood has a $150 minimum policy. So on a vault policy, it's .3% on $50,000 and up, but a higher percentage for values under that due to the minimum.
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Re: Do you insure your Gold?

Post by ahhrunforthehills » Wed Feb 22, 2012 6:18 pm

.
Last edited by ahhrunforthehills on Wed Aug 18, 2021 11:52 am, edited 1 time in total.
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Re: Do you insure your Gold?

Post by Gumby » Wed Feb 22, 2012 7:07 pm

ahhrunforthehills wrote:
Gumby wrote:
Adam1226 wrote: Rookie question--

How do the insurance companies value your coins?  For example, if I buy a 1 oz American Eagle today, it's worth about $1450.  Say it gets stolen 5 years from now and is worth $2000.  How much do I get?
You are responsible for calling up your insurance broker whenever you want to revalue the coins. So, if a few months go by and you see that gold is up 20%, you just call them up and tell them what the new value is that the coins should be insured for. Keep in mind that your premiums will be adjusted for the new value.
Not necessarily.  A high quality insurance company will sometimes automatically revalue it (within moderation) when you file a claim.  I forget the technical term for it.

I lost a wedding ring that was appraised during 2006 gold prices.  They cut me a check for the replacement value at no extra cost (or raising my premium) even though gold tripled in price.  No questions asked.

But on the flip side, high quality insurance costs a lot more than mainstream insurance.
That has nothing to do with the "quality" of the insurance company. What you're talking about is written into the kind of policy you purchased. For example, when you're insuring a ring, you usually have a choice of "Actual value policy," "Replacement policy," or "Valued At Policy". Almost all insurance companies offer these kinds of policies (for wedding rings) and you'll always pay the appropriate premium for the policy you get.
Last edited by Gumby on Wed Feb 22, 2012 7:12 pm, edited 1 time in total.
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Re: Do you insure your Gold?

Post by alvinroast » Thu Mar 15, 2012 2:02 pm

I don't have enough physical to worry about at this point. More and more though I'm thinking that insurance policies should only be purchased after you've exhausted all other security options. First get the safety deposit box,etc then worry about the insurance.

Unlike most people I've got earthquake insurance on the house. I looked at what black swan events could cause the most damage to our assets and decided it was reasonable in the short term. (One less thing to worry about). I just received the renewal notice and the company decided that replacement would cost 1.5 times the current market price. The problem is that the current market price is mostly for the land. If an earthquake wiped out our house we could probably still sell the land for $200-250k. Since the deductible is now $50k I'm seriously considering just investing in earthquake straps for the house and planning on losing $100-150k (total loss of the house) in a worst case scenario situation. Maybe the PP has changed my thinking, but I think we could weather the loss of 15-25% of assets in a major earthquake and save the $1000/yr earthquake premium for insurance future gold purchases. :D

If we lived in a million dollar home I'd want it fully insured. Likewise if I had 25% of financial assets in physical gold I'd be all in on the insurance. Self insure to the extent you can first.

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Re: Do you insure your Gold?

Post by smurff » Sun Mar 18, 2012 4:37 pm

alvinroast wrote: Since the deductible is now $50k I'm seriously considering just investing in earthquake straps for the house and planning on losing $100-150k (total loss of the house) in a worst case scenario situation. Maybe the PP has changed my thinking, but I think we could weather the loss of 15-25% of assets in a major earthquake and save the $1000/yr earthquake premium for insurance future gold purchases. :D
alvinroast, what are "earthquake straps?"
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Re: Do you insure your Gold?

Post by alvinroast » Sun Mar 18, 2012 5:14 pm

smurff wrote:
alvinroast wrote: Since the deductible is now $50k I'm seriously considering just investing in earthquake straps for the house and planning on losing $100-150k (total loss of the house) in a worst case scenario situation. Maybe the PP has changed my thinking, but I think we could weather the loss of 15-25% of assets in a major earthquake and save the $1000/yr earthquake premium for insurance future gold purchases. :D
alvinroast, what are "earthquake straps?"
http://www.earthquakeprepared.com/earth ... rofit.html

I guess they're more commonly referred to as bolts. It's where you bolt the framing to the foundation. I believe this is standard building code in new homes (I did construction back in the 70-80's and we bolted the frame to the foundation). It's only needed for older houses like ours from the 40's. The city of Seattle has monthly classes on retrofitting, but I've been procrastinating until now.

http://www.seattle.gov/emergency/prepar ... l/home.htm
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Re: Do you insure your Gold?

Post by smurff » Sun Mar 18, 2012 5:54 pm

Thanks for the info.  I wonder if earthquake-resistant construction is the standard around the country.  Especially since (lately) there have been earthquakes in places that strangely never had them before.  Old faults being awakened, or simply being discovered.

If you bury your gold under your house, you should probably have earthquake upgrades, even if you're not in an earthquake zone, for that reason (old faults waking up).
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Re: Do you insure your Gold?

Post by steve » Fri Dec 18, 2015 6:56 am

has anyone had any experience with https://safedepositboxinsurance.com/
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Re: Do you insure your Gold?

Post by dualstow » Tue Jan 05, 2016 9:36 am

Did you end up going with them, Steve?
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Re: Do you insure your Gold?

Post by steve » Tue Jan 05, 2016 5:25 pm

dualstow wrote: Did you end up going with them, Steve?
I did, makes it easier to sleep    https://safedepositboxinsurance.com/
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Re: Do you insure your Gold?

Post by ochotona » Tue Jan 05, 2016 5:35 pm

steve wrote:
dualstow wrote: Did you end up going with them, Steve?
I did, makes it easier to sleep    https://safedepositboxinsurance.com/
So LESS expensive coverage than Hugh Wood ANA, and you can insure non-coin valuables also?  :)
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Re: Do you insure your Gold?

Post by Libertarian666 » Wed Jan 06, 2016 8:37 am

steve wrote:
dualstow wrote: Did you end up going with them, Steve?
I did, makes it easier to sleep    https://safedepositboxinsurance.com/
So they throw in an Ambien prescription too? What a deal!
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Re: Do you insure your Gold?

Post by sophie » Wed Jan 06, 2016 2:22 pm

I found them online some time ago.  It made sense, in that the Hugh Wood insurance doesn't care whether you have your coins in a safe deposit box or sitting in a bowl in your living room, but obviously there is a big difference in risk between the two - and your insurance costs should reflect that.

The big question, though, is whether this company has ever had to pay out a claim, and if so, did they keep their promises?
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Re: Do you insure your Gold?

Post by goodasgold » Wed Jan 06, 2016 3:05 pm

sophie wrote:

The big question, though, is whether this company has ever had to pay out a claim, and if so, did they keep their promises?
Excellent point, Sophie. I read the prospectus, and they even say they pay for losses caused by acts of war. So far as I know, no insurance company does this, so I am skeptical, if not downright suspicious, about this outfit.
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Re: Do you insure your Gold?

Post by steve » Wed Jan 06, 2016 3:10 pm

sophie wrote: I found them online some time ago.  It made sense, in that the Hugh Wood insurance doesn't care whether you have your coins in a safe deposit box or sitting in a bowl in your living room, but obviously there is a big difference in risk between the two - and your insurance costs should reflect that.

The big question, though, is whether this company has ever had to pay out a claim, and if so, did they keep their promises?
When I spoke with them I had the same question. They told me so far they never had to pay out a claim. However I felt that it was still worth getting the insurance.
This product is administered by Safe Deposit Box Insurance Company and underwritten by AXA Art Americas Corporation on AXA Insurance Company paper. AXA Insurance Company maintains an “A (Excellent)” Financial Strength Rating and an “a+” Issuer Credit Rating from A.M. Best. AXA Insurance Company has a financial size Category of VIII. 
My hope is I never have to file a claim to find out.
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Re: Do you insure your Gold?

Post by stuper1 » Wed Jan 06, 2016 4:04 pm

Their website says that they won't pay if your gold just goes missing (i.e., if there is no sign of break in).  I'm not an expert on safe deposit box burglary mechanisms.  Does anyone have an idea what the chances are of an inside job versus an outside job?
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Re: Do you insure your Gold?

Post by Libertarian666 » Wed Jan 06, 2016 9:10 pm

steve wrote:
sophie wrote: I found them online some time ago.  It made sense, in that the Hugh Wood insurance doesn't care whether you have your coins in a safe deposit box or sitting in a bowl in your living room, but obviously there is a big difference in risk between the two - and your insurance costs should reflect that.

The big question, though, is whether this company has ever had to pay out a claim, and if so, did they keep their promises?
When I spoke with them I had the same question. They told me so far they never had to pay out a claim. However I felt that it was still worth getting the insurance.
This product is administered by Safe Deposit Box Insurance Company and underwritten by AXA Art Americas Corporation on AXA Insurance Company paper. AXA Insurance Company maintains an “A (Excellent)” Financial Strength Rating and an “a+” Issuer Credit Rating from A.M. Best. AXA Insurance Company has a financial size Category of VIII. 
My hope is I never have to file a claim to find out.
Of course they have an excellent financial strength rating if they have never had to pay a claim!

Can I start an insurance company like that too?
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Re: Do you insure your Gold?

Post by StdDeviant » Wed Mar 15, 2017 1:09 pm

MediumTex wrote:
Gumby wrote: I finally looked into a rider on coins in a safe deposit box. I was quoted an annual premium of a little less than 2% of the value of the coins. That seems like an awfully high expense ratio to tack onto Gold each year.
That's funny. It sounds like that insurer doesn't have much confidence in the security of safe deposit boxes.

Does that seem high to anyone else?
2% compounded over 35 years doubles the initial value.

So it sounds like the insurance company thinks 1/35 of all banks get their safety deposit boxes robbed and cleaned out each year. ;)

Personally, I don't like the idea of insuring the gold. A. It raises the visibility of what I own. Who knows how many employees of the local insurance broker and their home office will know what I have and where it is. B. Super expensive.

I'd rather spread it around a few places, assume the likelihood of losing the contents of any given safe deposit box is extremely low (and a tolerable risk). Although I'd stand to lose 1/5 of my gold if I, say, spread it among 3 safety deposit boxes and 2 non-bank hiding places, losing only one of those "stashes" would mean a loss of 20% of my gold, or 5% of my net worth. Given the cost of insurance at 2% per year on the gold if it were all in safety deposit boxes, or 1/2 % annually of my entire portfolio, unless I fear a safe deposit box robbery every 10 years, suddenly the risk of self-insurance and diversifying my storage sites seems very tolerable to me!
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Re: Do you insure your Gold?

Post by flyingpylon » Wed Mar 15, 2017 7:01 pm

A rider on a homeowner policy is typically around 2%, but you can get insurance through a company that insures collectibles like Hugh Wood Inc for .3%.
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Re: Do you insure your Gold?

Post by steve » Thu Mar 16, 2017 8:43 am

I insure my gold. Well worth the peace of mind https://safedepositboxinsurance.com
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Re: Do you insure your Gold?

Post by dualstow » Thu Mar 16, 2017 11:04 am

steve wrote:I insure my gold. Well worth the peace of mind https://safedepositboxinsurance.com
Have you used them for a long time, Steve?
I probably don't have enough coins to justify insurance, but I'm getting there, and will probably want to insure when I hit retirement age.
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