How safe is that safe-deposit box?

On her daughter's wedding day, Zulekha Kureshi made an early morning trek to her bank to pick up some prized possessions - tens of thousands of dollars worth of antique gold and diamond jewelry that the family had saved for such occasions.

But she soon discovered that the jewelry was gone.

"The bank had drilled our safe-deposit box without any witnesses and told us the box was empty when they opened it," says Latif Kureshi, Zulekha's husband. "We believed the bank was the safest place to keep our jewelry."

The bank, Mr. Kureshi adds, "won't even talk to us."

The family has since hired an attorney to file a lawsuit. Bank officials, citing privacy laws, declined to discuss the matter.

Despite the fact that millions of Americans rely on bank safe boxes to protect their valuables, some box owners like the Kureshis have learned that these boxes are not as safe as they might have believed.

"Banks do not insure the contents of safe-deposit boxes," says David McGuinn, founder and president Safe Deposit Specialists in Houston. "Many, many people assume the contents of their safe boxes are insured by the bank or by the FDIC, but they aren't. You have to arrange for your own insurance."

Valuables in a safe box aren't like cash in a savings account that the bank can use to make loans to other clients, Mr. McGuinn points out. That is one key reason why items in a safe box is not FDIC- insured to $100,000, as are cash accounts.

Banks carry only liability insurance. Individuals can collect only if they prove the bank was negligent, says McGuinn, who is often called as an expert witness in safe-deposit cases.

To be absolutely sure that a specific item of value is covered, insurance industry experts recommend that individuals attach a separate "floater" to their homeowner's or tenant's insurance policy.

Most policies fail to mention the words "safe deposit" or "safe box," says insurance agent Dick Van Duzer of Dick Van Duzer & Associates in Los Angeles.

Such an omission could lead to a dispute if items in a safe-deposit box are lost or stolen. "For items that aren't scheduled, there's a big limitation on theft," he says.

Mr. Van Duzer mentions that he can't recall a single instance of someone attempting to collect on an item missing from a safe-deposit box in his more than 40 years in the business, adding that he has only had one client who specifically requested in-vault coverage.

McGuinn is now trying to get banks to be more proactive in letting people know that belongings in safe deposit are not insured. He has advised banks to post signs near the safe-deposit vault reminding people of this fact and to place a similar statement in the safe-box lease agreement.

A safe-deposit vault located in one of the smaller World Trade Center buildings, for example, proved vulnerable to extreme heat that resulted from the Sept. 11 terrorist attacks. Burning jet fuel reduced documents inside to ash and jewelry into heaps of molten metal. "People are now claiming the bank never told them their belongings weren't insured," McGuinn says, adding that the wording of the lease was vague.

The fine print on the lease told box holders that the contents of their safe-deposit boxes "may not be fully protected" by the insurance coverage maintained by the bank.

That passage led some box renters to believe the items would be at least partly insured. However, the insurance ultimately covered only liability if the bank were found to be negligent.

That was determined not to be the case in the WTC attacks, and a class-action lawsuit filed by several box holders was recently denied.

"We now have the option of appealing that decision or just representing the class as individuals," says attorney Bill Dahill, but he doesn't know when that decision will be made.

Mr. Dahill recalls that the bank initially showed no interest in working with the box holders. "But after the lawsuit was filed," he says, "the bank said it might consider making settlements with individuals, and it has, in fact, reached settlements with a number of victims."

Water is often another cause of concern for safe-deposit-box holders. Severe flooding in Houston in 2001, reportedly ruined a 1952 Mickey Mantle rookie baseball card kept at the Houston branch of the Bank of America. The card was valued roughly at $30,000 and the owner had no insurance, says McGuinn.

"It's virtually impossible for banks to offer safe-deposit boxes that are truly watertight," McGuinn adds. To make matters worse, he notes, many safe-deposit vaults are in a bank's basement - often the first place inundated when a river overflows.

Other box holders have experienced problems with theft.

An Idaho multimillionaire, after entering his bank's vault, discovered that his entire box was missing, according to Gary Slette, an attorney from Twin Falls, Idaho, who represented the victim. It seemed that a thief used a stolen key to access the box, absconding with rare gold coins, precious gems, and cash valued at hundreds of thousands of dollars.

The multimillionaire, who did not want his name used for this story, won his case against the bank in court after proving that it was possible to have that amount of cash and valuables in a 2-by-5-inch safe box, says Mr. Slette.

In spite of these perils, safe-deposit boxes remain one of the most secure ways to protect valuables. Experts recommend people use safe boxes for documents that are impossible - or at least a major nuisance - to replace. The list includes real estate deeds, titles, mortgages, leases and contracts; stock and bond certificates; insurance policies; birth, marriage, and death certificates; divorce decrees; and immigration papers, to name a few.

Some box holders also like to keep photographs or a video of home possessions in a safe deposit in case they're stolen or destroyed by fire or flood.

Safe-box users, experts say, should avoid storing anything that they might need to get their hands on immediately, like a passport for travel, because the bank might be closed.

And what about a will? That depends on what state laws say about who has access to a safe-deposit box in the event of a person's death. Some states allow heirs and executors access to safe boxes in the event of the death of the box holder; some do not.

And just as a precaution, McGuinn suggests visiting a safe-deposit box at least once a year to make sure everything's OK.

"Lack of activity or unpaid rental fees on your safe-deposit account could lead a financial institution to believe you've abandoned your safe box," he says.

Experts offer the following suggestions when renting a safe-deposit box:

• Hold on to documents proving you possess a safe-deposit box. Keep the original lease agreement in a secure place at home.

• Ask for a copy of your bank's rules and regulations in regard to safe boxes. Read and file it with the lease agreement.

• Keep a detailed list of everything in the box.

• Make photocopies of every document in the box, as well as photographs of valuable items like jewelry. Keep this evidence at home with your lease agreement, along with any proof of ownership.

• Buy "floater" attachments for your homeowner's or tenant's insurance policy on any valuables stored in a safe box.

• Visit your box at least once a year.

• If you move, notify your bank's safe-deposit division of the new address. Changing the address on your bank accounts may not be sufficient.

• If your area is prone to flooding, keep valuable documents in airtight containers inside the safe box.