Can You Insure Cash in Your Home? A Guide to Safeguard Your Money

Many people like to keep some cash at home for various reasons, such as emergencies, small purchases, privacy, or fear of negative interest rates.

Cash Insuring
Insuring Cash | Dick Law Firm

However, keeping too much cash at home can be risky and costly.

In this article, we will explore the dangers of storing cash at home and the options for insuring it against theft or loss.

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The Dangers of Storing Cash at Home

Cash is a tangible asset that can be easily destroyed or stolen.

Some of the common dangers of storing cash at home are:

Fire

Cash is highly combustible and can be incinerated in a fire.

Keeping it in a safe does not guarantee its protection, as safes can also be damaged by high temperatures or explosions.

Flood

Cash can be carried away by water or damaged by moisture.

Even if it is recovered, it may not be accepted by banks or merchants due to its condition.

Earthquake

Cash can be buried or lost in an earthquake.

It may also be difficult to access your home or safe after a disaster.

Theft

Cash is an attractive target for burglars, who may break into your home or safe.

It is also easy to conceal and spend, making it hard to trace or recover.

Loss

Cash can be misplaced, forgotten, or thrown away by accident.

It can also be eaten by pets or rodents, or damaged by insects or mold.

The Options for Insuring Cash at Home

Most homeowners insurance policies do not cover cash or other forms of currency, such as coins, checks, money orders, gift cards, or prepaid cards.

If they do, the coverage is usually limited to a few hundred dollars.

This means that if your cash is stolen or destroyed, you will not be able to claim it from your insurance company.

However, there are some options for increasing your coverage for cash at home:

Endorsements

You can buy higher coverage amounts for cash and other valuable items through add-ons to your home insurance policy, often through something known as an endorsement.

Provide proof of ownership and value of your cash, such as receipts, bank statements, or appraisals.

You may also need to meet certain security requirements, such as having a bolted safe or a camera system.

Specialty policies

You can buy a separate policy that specifically covers cash and other valuables at home.

These policies may offer higher limits and broader coverage than endorsements.

However, they may also be more expensive and have more exclusions and conditions.

Bank accounts

The safest place to keep your cash is in a bank account.

Bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor per bank.

This means that if your bank fails, you will not lose your money. Bank accounts also offer other benefits, such as interest, convenience, security, and online access.

Can You Insure Cash?

Cash can be insured, but not by most homeowners insurance policies.

As I explained in the article, you have three options for insuring cash at home: endorsements, specialty policies, or bank accounts.

Each option has its pros and cons, depending on how much cash you have and how you want to protect it.

Conclusion

Keeping cash at home can be dangerous and costly. Most homeowners insurance policies do not cover cash or only cover a small amount.

You can increase your coverage by buying endorsements or specialty policies, but they may have limitations and drawbacks.

The best option is to keep your cash in a bank account, where it is insured and protected.

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