Moving Insurance: What You Need to Know
Whether you choose to hire a professional moving company or handle the dirty work yourself, you’ll need to consider how much you are willing to pay to protect and possibly replace your possessions in the event of damage, loss or theft. So what do you know about moving insurance?
For do-it-yourself movers, buying insurance falls to the individual. But when you hire the services of a moving company, the options become a bit more involved.
We’ll discuss the key ideas you need to know to affordably protect the things you’re moving. Read on to determine the best, umm, move for YOUR move, as it applies to understanding and pricing moving insurance.
What are your options?
Moving the contents of an apartment is a fairly involved process, and there is a chance some of those things could be damaged or even lost along the way.
Federal laws exist which provide important protections for your possessions when they are carried on an interstate move. The U.S. Department of Transportation Federal Motor Carrier Safety Administration oversees these matters and sets policies.
As determined by law, moving companies are, in fact, held liable for damage occurring to goods they are moving across state lines. The relevant question for both the mover and the moving company is, how liable?
How to protect the value of your stuff
Protecting your things is a matter of cost.
When your moving company estimates the cost of your move, the research they’ll do results in a moving valuation, also called a bill of lading.
A factor in the cost of the move will be how you choose to protect your possessions.
Full replacement value protection (full valuation)
This is just what it sounds like, the offer to provide the full value necessary to replace damaged, lost or stolen goods.
The price of an initial, legitimate moving estimate should reflect this full value replacement, also called full valuation.
While this option offers the most protection, it also costs the most.
If you choose to waive this level of coverage in order to reduce the cost, be aware that your level of protection is also reduced.
Released value: 60 cents per pound per article
The next, lesser-cost option, after waiving full replacement coverage, is known as released value.
This coverage is, essentially, free, and the least protection allowed by law. With this option, the value of goods is based solely on weight, typically 60 cents a pound, not what it actually costs to replace the items.
Third-party insurance coverage
An important option is deciding whether to purchase specific insurance coverage for your things, which typically kicks in after the moving company contributes their legal share, in the event of a claim.
This coverage, whether secured independently or with the help of the moving company, is really administered by a third party, not the moving company itself.
What’s best for the moving consumer?
According to John Bisney of the American Moving and Storage Association, a non-profit group which represents the professional moving industry and seeks to educate consumers about that industry, laws were changed in 2012 to provide that a written estimate given by a moving company must include a price for full valuation of goods. The consumer must waive those rights to receive only released value coverage.
Why would a consumer do that? To reduce the cost of the move. Because offering only released value protection reduces what they would have to pay in the event of a claim, moving companies are willing to charge less to handle your move.
While this option certainly exists, think very carefully before you formally agree to accept only 60 cents a pound as payment for potentially losing the entire value of your things.
Bisney’s advice to consumers is to begin the process by contacting their insurance agent. Armed with facts about the coverage they already have, consumers can then make an informed decision. Bisney makes a clarification which movers should understand: "It's also important to remember that movers do not provide or offer insurance! Insurance is provided by third parties (insurance companies) and is regulated at the state level by insurance commissioners. Movers can only offer you two levels of valuation."
Based on the value of their property and the caveats of their existing insurance policy, either choosing full valuation or purchasing some form of third-party moving insurance would be a wise move for most consumers to at least consider in order to best protect their possessions.
Where should you get moving insurance? You can compare prices…
When you opt to buy third-party coverage, you have options.
Again, you should inquire with the company which handles your renter’s insurance to see what additional specific options for moving coverage exist. You might be able to add a special-perils contents rider to cover a move, for instance.
Many moving companies, of course, partner with insurance companies to offer coverage. This option will be presented to you, by law, in the full valuation price estimate given to you by the moving company.
As the moving consumer, you have the option to compare the full valuation price with the price of securing your own third-party moving coverage.
By the way, even if you opt to move yourself, you can still buy a type of third-party insurance coverage to protect your stuff.
Does renter’s insurance protect your move?
Check your renter’s insurance policy to determine how you might be covered for moving. You may have some protection available for your personal property with certain limitations, but most likely you would need extra coverage to fully protect a move.
What if your move does NOT cross state lines? Do you get the same protections?
If your move stays within the same state, the laws of that state will govern your protection as a mover, not federal guidelines. Click here to check your own state’s rules.
Your responsibilities when you pack
There are actions you can take (or not take) which will affect how the law protects your things.
You are not allowed to pack dangerous or perishable goods, for instance.
Items valued at more than $100 a pound (jewelry, for instance,) must be declared as such to the moving company so that the value is fairly added to the overall estimate.
Keep in mind that insurance coverage may require that the moving company pack the goods in order to accept responsibility for their condition after transit.
An important note, and an interesting detail…
In the interest of keeping everybody honest, remember never to sign a blank form! Also, do not sign a form which waives your right to standard protection under the law.
When a consumer makes a damage claim against a moving company for released value, that claim is handled by independent arbitration, and the arbitrator’s decision is typically binding. The mover has a limit of nine months to make a claim known to the moving company (perhaps enough time to get all those boxes unpacked!)
Photo credits: Shutterstock / Tigger11th, PSNJua, Palto