The following is my answer to a Quora question: “Does
insurance cover the cost of money taken during a bank robbery?”
The FDIC protects your deposits from bank failure up to
$250,000 per name, regardless of the number of accounts. It does not protect your money from bank
robbery, because it does not need to. When your money is in the bank, the bank is the
custodian in trust. Money taken from a
robbery is taken from the bank, not the individual depositors. In such a case, the bank has insurance that
pays out to the bank, not the depositors. As far as the depositors are concerned,
nothing happened to their money.
If, however, you have assets in the safety deposit of
the bank, which are not cash, certificates of deposit or any financial
instrument, you should have insurance specific to the item. The bank will also have one, but it is
preferable for you to have one according to your valuation, which may differ
from the banks.
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