Is the Cash Under the Mattress Safe?
The last thing anyone ever wants to experience is a home robbery. There are few worse invasions of privacy and security. If you are a homeowner with a mortgage, homeowners insurance is required. If you have paid off your house, homeowners insurance is not required but you better have it. It would be incredibly foolish to not have arguably your largest asset uninsured. As a quick note, we advise anyone reading this who does not own a home but rents, to make sure they have renters insurance. It is affordable, and invaluable in the event of a theft or break-in.
The best case scenario for a bad situation is that no one is home and no one gets hurt. There is some solace to be found in that insured stolen valuables, can be replaced. The sentimental value will be lost, but the physical object will be replaced. Now some of you are thinking well, I have everything I need in a safe I am protected. It certainly helps to have a safe, that is indisputable. Safes, however, can also be stolen or broken into. The level of sophistication and equipment will vary, but it is still possible. What about the contents in the safe? Most people, leave banknotes and important documents inside. What about those items? How do you replace the cash that may have been stolen from you? The short answer, you better check your insurance policy.
No, It’s Probably Not
Theft of cash is a tricky subject for homeowners insurance. Typically, the amount of money covered is relatively small, say a few hundred dollars. The cash can get lumped in together with other pieces of currency or value (think gold coins, silver bars, etc). There are some policies that will cover a higher amount. This will come at a higher premium. A homeowner may be able to have a custom policy written if they can prove an insurable reason to have that much cash on hand. There will be strict security requirements in place for a policy of that nature. We are talking bolted to the ground safes, camera systems, etc. Anyone can say they just had $10,000 cash or gold coins stolen from their home. It would bankrupt an insurance company after about a week of everyone making false theft claims.
The safest place (for insurance purposes) to keep cash and coins, is in the bank. There are certainly merits and detractors for using a bank. If you are someone who does not live in an area close to a bank, keeping large amounts of cash on hand at home is more likely. What is more troublesome, driving an hour to the bank, or losing your savings to home theft? You might not like the long drive, but you will likely still have all of your money. The FDIC insures up to 250,000 cash in a bank account. This is also another reason why your homeowners policy only covers so little cash. There is already a major insurance policy guaranteed on your cash, in the bank.
So What To Do?
The only true way for you to protect your cash from being stolen is to not have a lot in your house. It is very tempting to stockpile at home in case of an emergency. Maybe you just don’t like driving to the bank. Perhaps you are waiting to buy a new car with cash you’ve saved over the years. The reason why doesn’t really matter all that much to the insurance company. It could be the best possible reason in the world. Unless you have a specific policy coverage amount, it will not be replaced in the event of theft. The best option is to play it safe, and only keep the amount of cash your policy will cover in the home.
