How to keep your wealth from the hands of thieves
Published 10/05/2015 | 02:30
The number of people keeping their valuables in secure vaults has shot up by more than a third over the last year - because of the rise in aggravated burglaries and the decision taken by the various banks over the last few years to stop offering safety deposit boxes.
This surge in the numbers rushing to store their treasures in such strong rooms is being reported by private companies offering safety deposit boxes.
"We have seen a 30pc to 40pc increase in demand for safety deposit boxes a year," said Seamus Fahy, co-owner of Merrion Vaults, a private security vault opened in Dublin's city centre about two years ago.
Sentinel Vaults, another private security vault in Dublin, says it has hit a target for customer numbers a year-and-a-half earlier than it had expected to.
"When we opened in October 2013, we had a three-year plan to secure a certain number of customers," said James Dwyer, manager of Sentinel Vaults. "We were already there after 18 months. Keeping valuables in the home is no longer an option. Thieves are a lot more sophisticated.
Even if you have a safe at home, burglars are going in with hand-held metal detectors - so they're well equipped to find your safe and to remove it."
Many wealthy individuals are also storing their jewellery in secure vaults because it can work out cheaper to do so than to insure precious gems kept at home, according to Mr Fahy. "A lot of our wealthy clients are taking their jewellery off their home insurance policies and putting it in a safety box instead," said Mr Fahy.
"It could cost you between €2,000 and €3,000 a year to insure €200,000 worth of jewels or valuables in the home - but as little as €200 a year to rent a box in a vault."
How much does it cost to store valuables in a secure vault?
The size of a safety deposit box dictates how much you pay. At Sentinel Vaults, it usually costs €199 a year to rent a small box which would suit storage of family heirlooms and jewellery.
However, Sentinel is currently running a promotion where you can rent a small box for a year-and-a-half for €199. A medium-sized box, suitable for family photos, wills and house deeds, costs €399 a year. Sentinel's larger boxes are priced at either €449 or €649 a year though you can pay more than €1,000 a year for a 'jumbo'-sized box.
Merrion Vaults charges between €199 and €1,150 a year for a box, again depending on size. A strong room, typically to store of paintings, fine art, valuable furniture and antiques, costs €12,000 a year - or €7,500 for six months.
What can I store?
Wealthy individuals often use safety boxes to store jewels, title deeds, cash, and gold and silver bullion.
However, it's not just the wealthy who are storing valuables in secure vaults.
"People in their 20s who are buying small amounts of gold are using the boxes to store their gold," said Mr Fahy. "Foreign students use them to store passports. Elderly people spending six months of the year away in Spain and so on are storing valuables while they're away.
"A lot of people keep family heirlooms, such as their great-grandmother's engagement ring."
Are secure vaults invincible?
Having your valuables in a secure vault is no guarantee that they are safe from thieves. Last Easter, a gang of burglars made off with a hoard that is estimated to be about €80m after they broke into the vault at the Hatton Garden safety deposit company in London. Gems worth millions of euro were stolen during the raid.
For this reason, it is wise to insure what you keep in a vault - but make sure the insurance stands up.
Merrion Vaults offers free insurance of up €10,000 on all boxes - however, if you're storing hundreds of thousands of euro worth of valuables, this cover would not be sufficient. You can however pay to upgrade your cover and insure your valuables for up to €150,000 a box. That insurance, which is underwritten by Lloyds of London, costs €80 a year for up to €50,000 worth of valuables, €150 a year for up to €100,000 of valuables, and €300 a year for up to €150,000 of valuables.
Sentinel also offers insurance, underwritten by Lloyds of London. It costs €62 a year to insure €20,000 worth of valuables with Sentinel through Lloyds; and €174 a year to insure €100,000 worth of valuables.
Be wary of blanket insurance policies offered by safety deposit companies, warned Mr Dwyer. "Such 'block' policies are being offered by some private safe deposit facilities throughout Britain and Ireland," said Mr Dwyer.
"It is not reliable cover as the policy is held by the facility owners and not you the customer, so it's up to the facility owners to decide whether to pay you if were you to make a claim. When you take out insurance, you should be provided with a policy document in your name in order to have genuine cover."
Do any of the banks still offer safety deposit boxes?
The safekeeping facilities typically offered by the main banks over the years were not safety deposit boxes as such - but rather the ability to leave a sealed envelope with the bank which it then kept in a safe place. Most banks did not charge for this service.
Last month, Ulster Bank became the latest bank to start pulling such facilities when it wrote to its customers and told them they would need to remove their valuables from the bank by mid-June.
AIB, Bank of Ireland and Permanent TSB are no longer accepting new envelopes and most are trying to phase out their safekeeping services.
"Bank of Ireland stopped accepting new safekeeping items in 2010," said a spokeswoman for Bank of Ireland. "In May 2014, Bank of Ireland commenced a phased removal of safekeeping facilities."
AIB continues to hold onto the envelopes of customers who have already left them in safekeeping with the bank. However, "while we don't proactively try to get them to remove their items, if they request to access the envelope we will give it to them and generally don't take it back," said a spokeswoman for the banks.
Could I rely on a home safe?
A high-security home safe could be an option if you would rather keep your valuables at home than in a vault. Such safes could cost several thousand euro.
"We would normally recommend a safe with an independent security test," said Neil Donnelly, founder of allsafes.ie. "We would recommend an EN-1143 Grade I or upwards safe - if the customer's budget allows for it as they offer much better security."
Most people only spend about €500 on safes, said Mr Donnelly, which suggests that most home safes could be easily broken into.
Common hand tools such as crowbars, hammers and chisels could be used to break into a light-security safe, according to Mr Donnelly, while more specialised tools such as thermic lances or diamond core drills would be needed to crack a high-security safe.
"We would also always recommend electronic locks, as keys can get lost or be copied," said Mr Donnelly. "No safe, no matter how secure, is unbreakable - so combining a safe with a good alarm system at home is a must."
Think of insurance bill before buying that €1m ring
The ultra wealthy can expect to pay more than €10,000 a year to insure valuables kept in their home - more than most of us pay for home insurance over our lifetimes.
Cover for incredibly valuable items must usually be arranged through a specialist insurer as most standard home insurance policies don't cover valuables worth more than a few thousand - never mind hundreds of thousands - of euro.
Aviva's standard home insurance policy for example will only cover an individual item of jewellery if it is worth no more than €2,600 - or 5pc of the contents sum insured (the maximum an insurer will pay out to cover contents damaged in your home).
Like other home insurers, Aviva offers you the option of paying extra to separately insure valuable items in your home. But your chances of getting a mainstream insurer to cover a jewel worth hundreds of thousands - rather than tens of thousands - of euro, are slim. Specialist insurers such as Chubb Insurance or Lloyds of London are your best bet when it comes to such expensive gems.
Chubb Insurance for example offers two types of home insurance policies: its Signature policy - which typically costs more than €10,000 a year and is aimed at the ultra wealthy, and its Masterpiece policy - which often costs more than €2,000 a year.
"Our clients typically have contents that are in excess of €150,000, and live in homes that have a rebuild value of more than €700,000," said a spokeswoman for Chubb Insurance. "We have no minimum or maximum limit to the value of valuable items we can insure. Worldwide, we cover many collections of jewellery, art and cars with values in the many millions of euro.
"We insure an eclectic mix of valuables such as art, antiques, hand bag collections, statues, memorabilia, wine, silverware, jewellery (old and new), to name but a few. Some of the single items of art, jewellery and cars that we insure are worth tens of millions of euro."
Sunday Indo Business