Safeguarding your bank locker

You can get compensation for loss, if any, by insuring the contents in the locker

A bank’s safe deposit locker may seem the embodiment of absolute safety. But what if items stored in a locker are lost or damaged? Recently, questions have been raised on the bank’s liability in such cases.

As holding a locker costs money and banks may often also request you to open a fixed deposit to get a locker, it is important for customers to understand what they get when renting a locker.

Banks not liable

When you enter into an agreement to rent a locker, the relation is that of a bailer and bailee. The legal parlance means that the bailer transfers his possession of movable goods, and not the ownership.

The locker provider has no idea of the contents stored or the value of the items. So, locker providers are not held liable for loss or damage of goods stored, says Saravanan Annadurai, Advocate, Madras High Court and Senior Partner at Saravanan and Partners.

As per the RBI too, banks are in no way liable for the loss of contents kept in the locker by the hirer. So, if there is a theft and you lose your valuables, or they are damaged, you really do not have any recourse with the locker provider.

What if the loss is not due to a break-in or natural calamity that affected multiple lockers, but localised to your possessions? You can file a complaint with the police to investigate.

The authorities will go through the CCTV footages to see if they can find out who may be the suspects. In this case, the locker provider has to co-operate in the investigation; but if it turns out that employees may be involved, there is still no liability for the losses, feels Saravanan.

That said, if you think that the loss is due to negligence on the part of the service provider, you can go to court.

Also, if there was mis-representation of the product or service, for example, if the lockers were promoted as fire or water-proof but were damaged due to fire or water, you can claim damages. You must first try to resolve it through the banking redressal system and, if that fails, you can file a case in the consumer court, says P Jhansi, an advocate with the Madras High Court.

Take insurance

A good way to ensure you get compensation for any loss is to insure the contents in the locker. The insurance agency will inspect the contents and arrive at a valuation before insuring it.

The policies may typically charge 1-2 per cent of the content value; charges may be higher if the cover is more comprehensive — covering loss not just at home or in the locker, but any location. Many providers such as HDFC Ergo, Tata AIG, Oriental Insurance and New India Insurance offer coverage for jewels.

One reason why you must keep the valuables in a locker rather than at home is to increase the chances of getting the claims settled.

For example, most jewellery insurance policies may not cover loss if the house was unoccupied for 30 days. Such issues typically do not arise with lockers.

An all-risk jewellery and valuables insurance cover provides comprehensive insurance protection, irrespective of whether they are kept in home safe or bank locker or being worn, says Parag Ved – Executive Vice President, Consumer Lines, TATA AIG General Insurance. The policy protects against any direct physical loss or damage, including fire, theft and burglary, earthquake, flood and accidental breakage or damage, worldwide.

Precautions

When you store documents, jewels and other valuables in the locker, it is important that you keep a record of the items. The list must be updated, when items are removed or added. This will help ascertain your loss, if any, without any doubt.

If the locker has not been operational and the bank has classified you as a high-risk category customer for some reason, keep in mind that the authorities can force open the locker after one year of inactivity.

Hence, it is a good idea to operate your locker off and on. Also, update your contact details at the branch so that they can reach out to you.

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