The affidavit of loss can be a very important tool for investors to understand. Here are the basics of the affidavit of loss and what it means to you as an investor.

The Affidavit of Loss

This document deals with the loss or physical distraction of a security. If you physically hold shares of stocks or bonds, there is a chance that the paper could be destroyed or lost. Instead of simply losing the rights that came with being a shareholder, you could potentially recoup your losses with an affidavit of loss.

When a loss or physical destruction occurs, you can utilize an affidavit of loss to protect yourself. Typically, you will need to have some type of identifying information for the security. For example, if you have the serial number, this can be very beneficial to prove that you were the owner.

How It Works

With an affidavit of loss, you will swear that the actual physical security was lost or destroyed. This is your assurance to the company that issued the security that it truly is gone. You can then ask for them to replace the security with another certificate. As an investor, this can give you a good alternative to use if you are physical securities go missing.

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