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You may invest in gold or silver as a means to have value that exists outside a bank—where most of your savings and other assets likely reside. Owning physical precious metals is also an investment option that doesn’t depend on a specific company, stock market, or even national currency to hold its value.

But owning gold and silver is a bit more involved than just clicking “Buy Now.” You must store and insure your metals properly to help protect yourself from theft, damage, and other disasters. Here’s what you need to know.

Why storing and insuring gold and silver the right way matters

Investing in gold and silver to help hedge against inflation and preserve your purchasing power is a good idea only if you can help protect those metals. That’s why storing and insuring your investment is so important.

Good storage guards against blatant risks like theft, fire, and flooding, but it can also prevent more subtle risks like humidity—which can wreak havoc on your metal over time. Good insurance will cover the rest. If all you’ve got is basic homeowners insurance, you probably don’t have adequate coverage for your metals.

Where to store physical gold and silver

You’ve got multiple options when it comes to storing your physical gold and silver. The one you choose will dictate the level of safety, ease of access, and the price (storage isn’t free). You’ll need to decide for yourself which of those elements is most important to you.

Home storage

Keeping your metals at home is best if you want maximum control and instant access. The trade-off is risk; it’s up to you to safeguard your gold and silver against all those external forces that want to take it from you—from natural disasters to thieves to sulfur compounds.

Your best practice is probably a serious safe that is tactfully placed in your home. You should also use discretion when it comes to those who know what you own. All to say: Home storage can work for a modest amount of gold or silver, but it puts more pressure on your personal security and insurance.

Bank safe deposit box

Instead of putting the metal under your own roof, you can elect to let the bank handle it. For a relatively inexpensive price, a bank box will give you professional security. Of course, you’ll replace your 24/7 access with banking hours and location.

Safe deposit boxes also generally aren’t insured by the bank itself; if you want protection beyond your personal security practices, you’ll need to arrange that coverage separately.

Third-party depository/vault

There exist dedicated vaults to hold precious metals. They come with both enhanced physical security and insurance made for precious metals. If you’re storing a lot of gold and silver, or even if you tend to buy and hold (i.e. access isn’t terribly important to you), this may be the way to go.

These depositories charge an annual fee for the storage and clean records of exactly what belongs to you. You’ll benefit from a paper trail that makes claims far easier to prove, if it’s ever needed.

Segregated vs. allocated vs. commingled storage

When your gold or silver is in a vault, what do you actually own? That depends on whether you’ve opted for segregated, allocated, or commingled storage.

Here’s a quick comparison:

• Segregated storage – Your metals sit in their own spot, in a bin or on a shelf, labeled with your name. Metals aren’t mixed in a community stash. If you request delivery, you’ll get those exact pieces back.
• Allocated storage – The vault holds metals on your behalf as part of a larger pool. You still have a claim on a set number of units with specific weight and purity, but you won’t get a specific bar when you sell or take delivery.
• Unallocated storage – The gold you can claim is measured in ounces instead of specific units. For example, your account may show 10 ounces. Instead of a 10-ounce bar, you may take delivery of whatever mix of bars and coins adds up to that amount.

How to insure your gold and silver

When it comes to insuring your precious metals, it’s all about filling any coverage gaps left by your default insurance. You’re essentially trying to solve these two questions:

1. If your gold and silver disappears or is damaged, who pays for it?
2. How can you prove what you’ve lost?

Here’s what to know.

What homeowners/renters insurance does (and doesn’t) cover

With most homeowners’ and renters’ insurance policies, precious metals are a “special limit” category. They tend to cover only a portion (perhaps a few thousand dollars) of your metals investment for theft. Other types of losses may not be covered at all.

Unless you upgrade your coverage, you’re self-insuring everything above that dollar amount.

Scheduled riders vs. standalone precious-metals policies

To improve any insufficient coverage from your homeowners’ or renters’ policy, you can add an endorsement (also called a “rider”) to your policy specifically for precious metals. You’ll need to tell the insurer exactly what you own and assign a dollar figure to each piece. 

If you own a lot of gold and silver, or if you currently hold it in more than one spot, a standalone precious-metals policy is likely the way to go. This is also handy if you’re holding bullion through a business, as personal policies won’t insure that investment. 

Depository/vault insurance and documenting your holdings

Again, using a professional vault tends to come with its own insurance. But that doesn’t automatically mean you’re fully covered. Be sure you understand any per-account limits and what specific risks are covered.

No matter where you decide to store your metals, you should still keep records—think invoices, photos, serial numbers, vault statements, etc. That way you’ll be prepared for whatever the claims process entails.

Costly mistakes to avoid 

The biggest mistakes when it comes to physical gold and silver tend to come down to taking your storage and insurance needs too lightly. Here are some major mistakes to be aware of:

• Stashing your metals in obvious spots (bedroom closet, under a mattress etc.)
• Buying a cheap and lightweight safe that you can’t be bothered to bolt down
• Talking openly about your investment
• Storing your coins in plastic holders containing PVC or similar containers which can chemically damage your metal over time
• Relying only on your basic homeowners or renters insurance and assuming you’re fully covered
• Assuming a bank safe deposit box is automatically insured by the bank
• Keeping poor records (no photos, serial numbers, invoices, or vault statements)
• Using commingled or unallocated storage without understanding you might only own a claim instead of a specific bar or coin

It’s also worth mentioning that you should avoid an investment portfolio that’s too heavy in metals. The smart move is to treat them as one piece of a diversified portfolio.

The takeaway

While precious metals are oftentimes considered a safer bet than a volatile stock market or ever-depreciating U.S. currency, this store of value comes with its own risks. If you’re not meticulous, you could end up losing your metals to theft, flood, or fire. Storage and insurance is extremely important when it comes to owning gold and silver.

Frequently asked questions

How much does it cost to store gold and silver in a vault or depository each year?

To store gold and silver in a vault or depository, you can expect to pay a small percentage of the total value you store—often around 0.72% to 0.96% depending on the storage type.

Can I store metals for a gold IRA at home?

You cannot store metals for a gold IRA at home. You must use an IRS-approved custodian to hold your precious metals. Once you take delivery, they are treated as a distribution and no longer in your IRA.

Does homeowners’ insurance cover gold?

Homeowners’ insurance can cover gold, but by default does not cover a large amount. You can request more, however, with a scheduled endorsement that lists each item and its value.

What are the safest places to hide gold and silver at home?

As a general rule of thumb, the safest places to “hide” gold and silver tend to be heavy, fire-rated safes that are bolted down and put in an inconspicuous place where it wouldn’t draw attention during a casual stroll around the house. Of course, this will vary based on the specifics of your situation and dwelling.