Moving Insurance – It Pays to Be Protected

There’s nothing quite like seeing all your worldly possessions stuffed into a truck. Naturally, you worry and wonder about what shape your possessions will be in once they arrive at your new home. In the same way that you get health insurance coverage to safeguard your personal health, this is where moving insurance can help you sleep at night until everything is safely delivered and in its proper place. Accidents happen even to the most careful of people or moving companies. What follows is a primer on protecting your belongings during a move.

Do you need moving insurance?

This question has probably crossed your mind, for good reasons. It’s perfectly understandable why you might feel nervous about putting all of your household goods in the hands of strangers. What if they lose or damage or destroy your precious belongings? You may not be as concerned if you are moving down the street, but for a long-distance move, it’s certainly worth considering.

In certain cases, it’s advisable to get moving insurance. For example, you might have a lot of valuables or you’re moving during hurricane season to a state that might be affected and the chances of weather conditions damaging your possessions are more likely. For any number of those reasons, you should at least look into getting moving insurance.

What does moving insurance cover?

What your moving insurance covers will depend on the specifics of your policy. In general, moving insurance covers any damage done to household items while in transit (and possibly, storage). That means anything from an earthquake to accidental breakage, it’s all covered.

So, one of the most important questions to ask before hiring a moving company is what kind of liability it provides. You’ll want to make sure your belongings are covered in case of a mishap during the relocation. Your professional moving company should have more than one liability coverage option for you to choose from.

How much does moving insurance cost?

The cost of moving insurance will depend on key factors such as the value of your possessions and the type of coverage you select. The more coverage you get, the more you should expect to pay. As we outline below, the bare-minimum coverage called released value protection is typically included in your moving contract. The next-level option after the released value is the full value protection moving insurance. If you choose it, expect to pay about 1% of the total estimate of the value of your personal belongings. The cost of moving insurance purchased from a third-party insurer may be anywhere between 1% and 5% of your valuation estimate.

Does my homeowners policy cover the move?

Before you purchase moving insurance, we recommend checking your homeowner’s insurance policy to make sure you’re not already covered. Don’t just assume that your homeowners insurance (or renters insurance) will cover all household goods while moving. Policies vary from carrier to carrier. In general, while a standard homeowners insurance policy will cover personal property and reimburse you for about 50% to 70% of the value of your belongings if they are damaged in a disaster, many homeowners insurance policies don’t cover goods that are in transit. Some policies may only protect your household goods while the movers are packing them in your home.

What are your insurance options?

Your mover is liable for the value of the goods you ask them to transport. However, there are different levels of liability. Knowing the difference, and your rights and responsibilities as a consumer will help you choose the right level of coverage and declare value on your belongings.

All moving companies are required by federal regulations to offer two types of coverage to consumers on out-of-state moves. There is also a third option, insurance coverage by a third party.

Released value protection

The most economical option is called “released value protection” and is set at no more than 60 cents per pound. This means that you will be reimbursed for everything from your paperclips to family heirlooms at up to 60 cents per pound. In other words, if your 10-pound valuable is damaged during the move, the item will be weighed and then multiplied by .60 cents (.60 cents x 10). This number ($6) would be the dollar amount that the moving company is liable for, regardless of how much the item originally cost you. To give you a more concrete example, if the movers break your 365-pound refrigerator that originally costs $1,400 to buy, the moving company will only be liable for $219 under this basic coverage.

Released value protection is offered at no additional charge, but you must sign a specific statement on the bill of lading or contract agreeing to it. Just remember that this option compensates you according to the weight of the item, not its actual value. And, if you do not select released value, your stuff will be automatically transported at the full value protection level of liability and you will be charged accordingly.

Full-value protection

Of course, you may ask yourself, “If my things are only worth 60 cents a pound why am I paying someone a lot more to move them?”

All of your material belongings are certainly worth more than 60 cents a pound. For that reason, long-distance movers also offer what’s called “full-value protection.” The coverage is based on your valuation of the contents being transported. The cost is based on about 1 percent of the valuation, so if you decide all of your belongings being shipped are worth $50,000, you will pay about $500 for full-value protection.

Full-value protection allows the moving company two options if any articles are lost, destroyed or damaged during the move. This is also called “full replacement value.” The moving company, not the consumer, decides how amends will be made for the property.

The moving company can either have the item repaired so it is in the same condition as it was before being damaged or they can replace the item with another of like-kind. Basically, if your two-year-old washing machine is smashed, the moving company will not replace it with a new one. You will likely be given the fair-market value of a two-year-old washing machine.

Another caveat: Movers are not required to reimburse you for any item that is valued at more than $100 per pound unless it is specifically listed on the shipping documents. This is set by the Surface Transportation Board, the federal organization that oversees moving companies. For example, a bracelet that weighs four ounces and is worth more than $25 ($100 per pound) must be listed on the shipping documents or it will not be covered if it is lost, damaged or destroyed during the move.

If you opt for this coverage, you will have to inventory your belongings and list everything that is valued at more than $100 per pound and make sure it is listed on the shipping documents so that you are covered. This can be an overwhelming task once you start looking through your belongings.

Full-value protection and released value are not governed by state insurance laws. Because they’re federal, they fall under the Surface Transportation Board of the U.S. Department of Transportation.

Expanded mover coverage

Depending on your risk tolerance, you may decide to upgrade your coverage. There are several options available to consumers.

You can ask the moving companies from which you are getting bids if they offer other valuation options. If your moving company is covering your belongings, it is not insurance. Moving companies are not allowed to sell insurance. Instead, you are paying for stated liability. In other words, you are setting the limits for your moving company’s liability if your belongings are damaged, lost or destroyed.

Some moving companies offer expanded valuations. Declared value allows you to set a per-pound amount for your belongings. For example, if you decide your belongings are worth $6 per pound and your total shipment is 10,000 pounds, you are placing a valuation of $60,000 on the total shipment. That would be the maximum you would receive if the entire shipment was destroyed or lost. Individual items would be replaced with like-kind: for instance, a two-year-old washing machine for a two-year-old washing machine. This is important to consider because items such as used clothing have little actual cash value.

You can also ask if the moving company offers lump sum value, also called the assessed value. The coverage is basically the same except the consumer sets the amount by value instead of weight. This is better if you have a lot of small, high-value items that don’t weigh much.

What is valuation?

Moving companies may offer several different levels of liability under their “valuation coverage.” Valuation coverage is the amount of liability that your moving company is willing to accept in the case that your belongings become damaged or lost during a move. Each level of liability determines how much the movers will reimburse you if your goods become lost or damaged while in their hands. All these liability options provide limited coverage. Please note that valuation coverage is not insurance. What most people think of as moving insurance is actually valuation coverage.

What’s not included in valuation coverage

As important as what is covered, is what is not covered.

With valuation coverage, movers are not responsible for items in boxes they did not pack. Unless the box shows significant damage, you are not likely to be covered for damage to anything inside the box. You are also not covered for natural disasters, such as fire, hurricanes, tornadoes, windstorms, hail, etc. Also, if items are damaged while in storage that is not controlled by the moving company, you are not covered.

Third-party moving insurance options

There are also insurance companies that offer what’s called “relocation insurance.” These policies are similar to lump sum and declared value coverage that the moving company may offer. Some people prefer to have their belongings insured by a third party if the moving company they are using does not offer this type of valuation coverage.

You can also get total loss coverage, which will replace all of your belongings in case of a catastrophe, such as fire, theft, truck accident, etc. Individual items are not covered and this coverage is only in case of the total loss of your belongings.

Moving insurance options if you DIY your move

First, check if your renters or homeowners insurance policy covers your possessions if you’re transporting them in your vehicle or a rental car or truck. Then, consider the relocation insurance. As a separate liability policy, it can fill in the coverage gap when you move. If you rent a truck, you can buy the rental truck insurance. The rental company may be offering coverage for the truck, the cargo and all passengers. It really depends on the level of coverage you select. Most common rental truck moving insurance includes accident damage, cargo protection, medical and life insurance coverage for the passengers and supplemental liability coverage for accidents you cause. Theft, damage caused by improper packaging and normal shifting of cargo are typically excluded.

Tips for protecting your move

Take photos of your possessions before the move. It can’t hurt, especially if you have insurance. This way, if you have to file a claim you can show a before and after photo of your damaged item.
Pack carefully. Some of your actions may limit your mover’s liability, and packing is one of them. If you’re packing your own items, make sure to use the right boxes and packing supplies to pack as securely as possible. Do let your movers know which boxes contain perishable, dangerous or hazardous materials (this is where proper labeling comes in).
Let your moving company know if you have articles of extraordinary value. Communicate about any valuables, in writing. This may include any of your treasured possessions such as heirlooms, art, antiques, jewelry or any valuable collections.
Don’t wait to report loss and damage. You have nine months following either the date of delivery, or the date on which the shipment should have been delivered, to file a written claim.
If you’re moving within your state, check the state regulations regarding moving insurance. Each state may have its own rules and regulations governing moves within the state. Check with your state, county or local consumer affairs agency or state moving association if you’re moving to a new location within the same state.

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