Insuring And Protecting Your Gold And Silver – Forbes Advisor

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In the midst of economic volatility, some investors are flocking to gold and silver as an alternative to stocks, bonds, mutual funds and ETFs. In fact, some precious metals dealers are struggling to keep up with demand for bars and coins, and buyers are paying record-setting prices for rare coins.

The Gold and Silver Rush of 2020 is in full swing.

But as investors (including some who are new to the precious metals market) scoop up gold and silver bars and coins, they might be wondering about insuring their newly acquired treasure. Perhaps the most important thing to know about insuring investment-grade gold and silver—not the coins you collected as a kid that merely hold sentimental value—is that homeowners insurance typically doesn’t go very far in covering precious metals.

A standard home insurance policy has a $200 limit of coverage for gold and silver bars or coins. With gold surging past a record high around $2,000 an ounce in August, a $200 limit would cover just one-tenth of an ounce of investment-grade gold. And that’s not counting any deductible you might be required to come up with.

You can pay extra to raise your insurance limit. But even then, your coverage might fall short. For example, the Insurance Information Institute says you might be able to bump up the per-piece limit to $2,000 and the overall limit in the precious metals category to $5,000.

Another option is purchasing what’s known as a floater policy. A floater covers any kind of loss, even one that a homeowners policy won’t cover, such as misplacing a valuable silver coin. Any items that fall under a floater must be professionally appraised. This will give you broader coverage and a higher coverage limit.

Protecting Your Gold and Silver Stash at Home

“Insurance for your metals is a must with home storage. No matter how many guns you own or other protection you have, there’s always a risk of theft if you store gold and silver in your home,” says Joe Yaffe, co-owner of Gainesville Coins, a precious metals dealer in Florida.

If you do go ahead with storing gold and silver at home, consider stashing them in a safe that’s made to protect precious metals. Whatever at-home storage method you go with, resist the urge to bury your treasure in the backyard, squirrel it away in the attic or hide it under your mattress.

Rather than storing your gold or silver at home, Charles Stevens, chief operating officer of Bullion Box Subscriptions, a monthly subscription service for buying bars and coins, recommends putting it in a safe deposit box at a bank. However, keep in mind that the Federal Deposit Insurance Corp. (FDIC) doesn’t insure the contents of a safe deposit box. Banks generally don’t insure those contents, either.

Therefore, Stevens advises, if you decide to stash your gold and silver in a safe deposit box, you’d want to buy your own insurance. You might be able to cover these metals through an optional add-on to your homeowners insurance known as a scheduled personal property endorsement.

Using a Vault Facility

Yaffe says the safest option for storing investment-grade gold and silver is an authorized depository or vault. These tightly secured facilities will keep and typically insure your precious metals—at a cost, of course. Among the companies that offer this service are Brink’s, HSBC Bank and JPMorgan Chase.

“It’s oftentimes more expensive to insure your precious metals yourself rather than simply choosing vault storage,” Yaffe says. “Vault storage also gives you the peace of mind that your valuables aren’t stored [at home], lowering the risk of attracting burglars.”

Metals.com, a seller of precious metals, says this option might be the most cost-effective if you own gold, silver or other precious metals worth at least $20,000.

“Regardless of how large or small one’s precious metals collection is, it’s worth investigating every insurance option to make sure those valuables are covered in case of the unexpected,” Metals.com advises.

If you choose a depository or vault, be sure to inquire about its insurance coverage. For instance, does the facility have general liability coverage or does it have coverage that explicitly protects precious metals kept there?

“However you choose to store your metals, inform two people as to the details. They need to be individuals whom you completely trust and who are tight-lipped. They will need to gain access to your items if you become incapacitated or die,” suggests the Fisher Precious Metals…