How to Insure Gold and Silver Bullion

Coin collections and bullion have limited counter-party risks unlike virtually any other assets. Most forms of real estate, equities, bonds, cash, etc. all require other parties to fulfill obligations and promises made. Essentially the biggest risk to coin collectors and bullion investors is theft by someone most likely closest to them ( family members, friends, acquaintances ) or from a typical home burglary.

The vast majority of first time bullion buyers and coin collectors wisely choose to take delivery and first hand ownership of their chosen valuables. This makes a lot of sense as the buyer should certainly be able to entrust themselves in safeguarding their very own precious metal investments and coin collections.

It is rather common for coin collectors, collectible investors, and bullion buyers to seek insurance for their valuables whether they be stored in their home, bank safe deposit box, gold vault, or with a silver depository service.

Below we will cover various collectibles insurance options in further detail.

Home Insurance for Collector Coins & Bullion

Most typical homeowner’s insurance policies provide coverage for a cash related items but the coverage limit is often very low. Most home insurance policies place a max coverage limit of $250 on total items such as coins, banknotes, and ‘numismatic’ related items.

In the event of a loss in this case, your home insurance policy would only pay out $250 towards the replacement of any (or all) of these aforementioned valuable items kept in your home.

Home insurance company plans often also put limits on many other types of personal property.

A few examples are:

  • $2,500 to insure sterling silverware and precious metal related art and flatware.
  • $1,000 on stamp and collectible insurance.
  • $1,000 for jewelry insurance and furs.
  • $1,000 on personal watercraft and their trailers.
  • $2,500 on home stored business properties.
  • $1,000 on baseball cards and comic book collections.

A difficulty virtually every different kind of collection has is in proving first and foremost, that you even ever owned them (be sure to have a paper trail and documentation proof). The next issue especially for rare collectibles is in trying to correctly value the items after they have been stolen or destroyed.

For example, suppose you have a rare 1890 Morgan Silver Dollar collectible coin. Depending on its condition, it could be worth anywhere from as low as the silver melt value to over $2,000 at auction. If a coin collection has been stolen, how would you prove the condition that specific coin was in? Do you have any timestamped photographs documenting the condition it was in?

You could always try to amend your homeowner’s policy and either increase the insurance limit or schedule the valuable items for an additional premium. In the case of a valuable coin collection, that additional insurance premium can be huge and very cost prohibitive.

There are some specialty private coin and valuables insurance firms in the market but barring you owning a massive collection of valuables in your home, you may want to simply use other lower cost options to insure the value of what you have.

Bank Safe Deposit Insurance for Rare Coins & Bullion

You might choose to forego some first hand access in your home to try and prevent the loss of your collectibles like coin collections, bullion holdings, etc. by storing them in a bank safe deposit box.

The problem with this proposed solution is the following fact. All U.S. safe deposit boxes are not FDIC insured and virtually all banks do not self-insure their safe deposit boxes from theft (internal or external), or from natural disasters, war, and destruction.

Every year there are thousands of bullion buyers, jewelry and coin collectors who unknowing believe that since they rent a “safe deposit box” from a bank they are somehow insured from loss. That belief is simply not true given the facts.

There are some private insurance services which offer anywhere from $5,000 to $500,000 (or more) insurance plans for bank safe deposit boxes. Here is an example of one such service we found online. You do your own due diligence, we do not endorsing anyone linked here.

To keep all of one’s safe haven assets like bullion coins and bars in a bank also defeats one of the very biggest reasons many bullion buyers own physical precious metals in the first place.

In the event of a major market freeze or extended “bank holiday”, many bullion owners who choose to use safe deposit boxes may lose access to the safe havens they were depending on having if ATMs and financial market liquidity freezes.

Bullion storage in government regulated banks may not be the best option for bulky silver bullion especially without the use of an additional third party insurance policy in place. Given that the FDIC’s Deposit Insurance Fund only covers approximately 1% of all bank demand deposit accounts in the United States, it might behoove bullion investors and coin collectors to diversify their precious bar and coin storage completely outside the financial system.

Private Non-Bank Vault Depository Services for Coins & Bullion

Some secure logistics service companies (e.g. Brink’s, G4S, Malca Amit, Loomis) offer services where one can safely store bullion coins, bars, rounds, or even other collectibles such as (e.g art collections, coin collections, high value stamps, etc.) cost effectively.

This option may not be suitable for an individual with a small valuables collection or bullion stack. But it is somewhat common for even middle income investors to hold as little as $20,000 worth of valuables with a direct account at one of these aforementioned vault depository service providers.

Private non-bank vault depository services typically offer full insurance for their clients’ holdings through well known third party insurance firms such as Lloyd’s of London or Marsh & McLennan Companies for example.

Conclusion on Bullion Insurance

Perhaps a mix of intelligently hidden home valuables coupled with a mix-use of professional fully insured storage options may be the best option for someone with a larger position in collectable coins and bullion.

One may find the best solution according to cost and needs either with a local bank safe deposit box coupled with a third party insurance policy or perhaps in using a secure logistics firm to safeguard one’s valuables.

Remember if you do or do not insure your valuables, it is always best to remain shrewd and private with whatever you want safeguarded. To learn some creative ways to hide and intelligently store valuables close to or in your home, click here.

All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.