Should I purchase extra insurance for my move?

I am moving from Texas to Illinois and I have already chosen a mover. My question regards the insurance the mover offers for my move. The mover's estimate includes "sixty cents per pound" insurance and they offer optional "full replacement" insurance which costs an extra $400.00. Should I take the extra insurance? Would you please give me your opinion? Thanks!

Thanks for your good question. Let me start my answer by explaining that...while the loss or damage liability offered by moving companies acts much like "insurance"...it is not truly "insurance." Here are the differences between moving company "valuation" and "insurance"...

Valuation

  • Has its basis in transportation law.
  • Is a level of liability the carrier agrees to assume and, depending upon the level of protection requested by the customer, may result in higher transportation rates.
  • No Co-valuation is applicable.
  • Limits liability to the time in which the goods are in the care, custody and control of the carrier's actions or failure to act that are not excluded by the provisions of the Bill of Lading and tariff.
  • Is regulated by the Department of Transportation (DOT).
  • The methods of handling claims are specified in transportation rules and regulations, the carrier's Bill of Lading and tariffs. The shipper has nine months from the date of delivery to file a claim with the carrier, and two years from the date a claim was denied to file suit.

Insurance

  • Was developed to spread the risk of loss.
  • Is a contract in which the insurance company, for a premium, agrees to indemnify the shipper against loss from perils expressly stated in the policy.
  • A co-insurance provision may be applicable.
  • The insured is covered for listed perils and must show that a loss occurred and was listed peril.
  • Is regulated by each state.
  • There may be 50 different sets of regulations and laws which cover policy rates, claim procedures, statutes of limitations and policy limits.

These differences, and more information is outlined in the many articles you'll find in our Insurance (Valuation) Articles.

Now that we've gotten this out of the way, let me address your question.

You must assess your risk Bill. You are not moving around the corner...rather you are moving over 1,000-miles...so you risk is much greater than a local move. In addition, you should consider catastrophic loss. Most of us by life insurance, although we don't plan on dying anytime soon...rather, we buy it because we are aware that a catastrophic accident may happen and we need to be covered in the event such an accident occurs. With the $0.60 per pound liability, if such an accident occurs to your shipment, you would be reimbursed the weight of your shipment times $0.60. For example, if your shipment weights 8,000-pounds times $0.60 you would be reimbursed $4,800.00 when (in reality) an 8,000-pound shipment has a replacement value of (at least) $40,000.00. Therefore, the $0.60 valuation reimbursement shortfall of $35,200.00 and that is a lot of moola to loose.

So my answer is "yes," by all means go for the extra full replacement value liability. In the end you will probably not need it. However, if you do need it, you will be thankful for the rest of your life.

I should also mention that most movers offer different full replacement value deductible levels and you may want to consider selecting of of these deductible levels to lower the cost of the full value loss or damage valuation.

I hope answers your question. Thanks for visiting Avatar and good luck with your move!

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