Insuring gold?

[yankees60]

Earlier today I sent an email to my insurance agency asking what it would cost to insure gold that is a bank safety deposit box. I don't expect to get an answer until Monday at the earliest.

1) I assume that this would be a rider to home owners insurance?

2) Has anyone bought this? If so, I'd be interested in cost per $1,000 of coverage.

Thanks

Vinny

[ochotona]

Vinny,

https://safedepositboxinsurance.com/

I've had it for years

[flyingpylon]

As I recall, adding coverage to a typical homeowner policy is an expensive way to go. In addition to ocho’s suggestion, Hugh Wood Inc offers insurance for precious metals as part of their Fine Arts and Collectibles services. They’ll insure a minimum of $50k for around $150/yr. You can insure less than $50k but the rate doesn’t go lower.

https://hughwood.com/specialties/fine-a ... lectibles/

[InsuranceGuy]

[deleted]

[dualstow]

Lastly and most importantly, the disadvantage of scheduling gold is that the coverage is written according to appraised values at the time of issuance. If a loss occurs, payment will be made based on the limit at the time the coveraged is added and will not take fluctuations in value into consideration, such as those that may be caused by inflation or price appreciation.

Can you reset that after a huge change? Well, I guess that would require canceling the policy first, leaving one vulnerable. Maybe?

[yankees60]

Vinny,

https://safedepositboxinsurance.com/

I've had it for years

Many thanks for this. I had not idea such a thing existed. When I've read here and elsewhere exhortations to get insurance I just naturally assumed it'd be with my homeowners insurance.

Looked at the rates and it appears to be 0.2% of value, which should be compared to the expense ratio of holding the gold in paper form or any other way a third party is providing gold for you. The qualitative difference is that there is less between you and the actual gold.

I've yet to fully go through the site. What is your understanding of what incidents it covers? I have not yet looked to see if there are any deductibles involved.

I did see that they prominently display that same NY Times article that I'd earlier read after being made aware of it in this forum.

Thanks

Vinny

[yankees60]

As I recall, adding coverage to a typical homeowner policy is an expensive way to go. In addition to ocho’s suggestion, Hugh Wood Inc offers insurance for precious metals as part of their Fine Arts and Collectibles services. They’ll insure a minimum of $50k for around $150/yr. You can insure less than $50k but the rate doesn’t go lower.

https://hughwood.com/specialties/fine-a ... lectibles/

I will also investigate this but it seems like its premium is 50% higher (0.3% to 0.2%) than the prior recommendation.

Thanks for letting me know about this one.

Vinny

[yankees60]

Before relying on your homeowners insurance please check the provisions of your insurance policy. Many insurance policies only pay as little as $250 to replace the cost of coins, bullion, and similar types of items of value.

In most cases it’s possible to "schedule" your gold on your policy. What this amounts to is amending your policy to add precious metals which itemizes (or schedules) the assets, along with their valuations. Most insurance companies require the items professionally appraised and some insurance company will have limits on how much they will allow to be scheduled.

Lastly and most importantly, the disadvantage of scheduling gold is that the coverage is written according to appraised values at the time of issuance. If a loss occurs, payment will be made based on the limit at the time the coveraged is added and will not take fluctuations in value into consideration, such as those that may be caused by inflation or price appreciation.

I did do a quick scan of my policy last night and did note the $500 limit. Which would be of almost no value for the quality of gold I'd be purchasing.

Would professional valuations really be necessary for gold coins, which have a quoted price every day, if not every hour, every minute?

I do have replacement cost insurance but I assume that provision all gets excluded due to the "special" treatment afforded for coverage of gold coins?

Bottom line it seems like you are making quite the convincing case that insuring through my homeowners policy is NOT the way to go?

Thanks

Vinny

[InsuranceGuy]

[deleted]

[InsuranceGuy]

[deleted]

[yankees60]

I did do a quick scan of my policy last night and did note the $500 limit. Which would be of almost no value for the quality of gold I'd be purchasing.

Would professional valuations really be necessary for gold coins, which have a quoted price every day, if not every hour, every minute?

I do have replacement cost insurance but I assume that provision all gets excluded due to the "special" treatment afforded for coverage of gold coins?

Bottom line it seems like you are making quite the convincing case that insuring through my homeowners policy is NOT the way to go?

Thanks

Vinny

Professional appraisal of gold coins has been a requirement at every company I have worked for, which is several as I have been in the industry for 16.5 years.

The replacement cost coverage only means that covered property will be covered at replacement value and not actual cost value or depreciated cost. The sublimit for gold determines the amount of covered property and then replacement cost is applied for payout. This is necessary as unlimited coverage for cash money/collectibles/securities would leave the door for rampant fraud.

I'm not saying that your homeowners policy isn't the way to go just that insurance can be a complicated product. My hope was simply to help set better expectations for what you are getting so you can sleep better at night knowing you are covered. In this day and age many do not use an agent with the advent of online policy issuance so I try and help out when I see a situation that might have resulted in customer dissatisfaction in the past.

DISCLAIMER: I am not an Insurance Agent and not trying to drum up business but I am an insurance company employee.

Thanks for the additional information. I do use an insurance agent. Use Arabella Insurance for both home and auto and get the discount for having both with them. I'm guessing Arabella basically only serves the Massachusetts and surrounding areas?

Vinny

[boglerdude]

I have been in the industry for 16.5 years.

Insurance companies run the numbers so they can make a profit, so should we always self-insure for losses we can afford? (Odds are I'm going to lose money by buying insurance)

eg if our HOA has walls-in coverage, do I only need liability?

[yankees60]

I have been in the industry for 16.5 years.

Insurance companies run the numbers so they can make a profit, so should we always self-insure for losses we can afford? (Odds are I'm going to lose money by buying insurance)

eg if our HOA has walls-in coverage, do I only need liability?

One of the tenets of insurance is that you buy insurance for what you CANNOT afford. Therefore, yes, one should self-insure for what one can afford.

Which is why I last had collision insurance on any of my cars probably over 30 years ago.

I have paid so little for my cars (which have no attendant car payments) that I can afford to either pay for the damage to them or replace them. I do, though, have comprehensive insurance because it's relatively cheap and it did pay for $3,500 of damage when I hit a 20 pound deer. And, for a cracked windshield.

I also do NOT have AAA even driving the old vehicles I do. in 2007 I had to pay out of pocket $700 in towing bills. But put that against the $4,000 I've not paid to AAA over 40 years. I did not like paying out that $700 but I do like being ahead $3,300.

Vinny

[InsuranceGuy]

[deleted]

[ochotona]

When the cost of safe deposit box insurance + the safe deposit fee is noticeably above the expense ratio of AAAU, then I'm pushing the physical into a Donor Advised Fund and rebuying AAAU elsewhere. Similarly, if GoldStar Trust Co. gold IRA fees rise noticeably above the expense ratio of AAAU, it's all coming home to Chuck, and AAAU will be bought.

[dualstow]

Vinny,

https://safedepositboxinsurance.com/

I've had it for years

After frugal-level deliberation, I finally pulled the trigger recently. Took less than five minutes online to get started. I can breathe easy now.

*I'm teasing, frugal. You're a cherished member.

[Smith1776]

My insurance is knowing exactly which rock I hid it all under at the park.

[dualstow]

My insurance is knowing exactly which rock I hid it all under at the park.

Only you and the homeless guy in the buffalo check jacket saw, and he’s not talkin’.