Moving Insurance: every consumer who is moving needs moving insurance, yet few understand how it works, how much coverage is needed or how to obtain it. Whether you decide to do a self-move -- or have a professional moving company move your household goods and personal effects -- you should carefully consider how to best protect your belongings and which insurance option best meets your needs. After all, accidents happen and when an accident happens it pays to be prepared.
To start, it must be noted that moving companies do not offer traditional "insurance." Rather, movers offer "tariff based loss/damage liability" which moving companies call "valuation." Although mover's "valuation" functions much the same as "insurance" when loss or damage occurs, it has distinct differences and it is incorrect to refer to movers valuation as "insurance" (we do so in the title and content of this article so that customers are able to discern the scope of this article). Here is an article which explains the difference between mover's valuation and insurance which may help you understand the difference between moving company "valuation" and traditional "insurance" products.
Cargo Coverage vs. Catastrophic Coverage
There are two (2) types of coverage which you may need...
- Cargo Coverage: Provides coverage for loss or damage to individual items. For example: a leg is broken off or a chair or a box containing a lampshade is lost. Cargo coverage provides for the replacement or the repair of loss or damage to individual items. Cargo coverage also provides you with catastrophic loss coverage.
- Catastrophic Loss Coverage: Provides coverage for specific catastrophic events (such as a fire) in which a total loss of the shipment is experienced. However, catastrophic loss coverage does not cover damage to, or loss of, individual items.
Companies which offer "self moves" (moves where the company provides the containers or trucks which you load and unload) do not generally offer cargo coverage for loss or damage to the articles you load into the company's trucks or moving containers. However, such companies may offer coverage for catastrophic loss. You should ask the representative of the self-move company you are employing if any insurance is included in your basic self-move cost and what the exact terms and amount of such coverage may be.
Moves Performed By Professional Moving Companies
If you receive a moving cost estimate from a mover and you ask "does this price include insurance" the mover is likely to answer "yes." However, you should also inquire as to the type of insurance which is included, because the mover has most likely included only the very basic tariff valuation of $0.60 per pound per article in the cost estimate. This coverage which (for a shipment which weighed 10,000 pounds) would provide you with $6,000 should your shipment suffer a catastrophic loss (10,000 pounds x $0.60 = $6,000) is woefully inadequate. Furthermore, if a 32-inch flat screen TV (which weighed 70 pounds) was damaged your mover would offer you a settlement of $42.00 ($0.60 times 70 pounds = $42.00) when the replacement cost of such a TV may be $400.00. Clearly, $0.60 per pound per article valuation may not be sufficient protection for your shipment.
What Are Your Goods Really Worth?
Transportation professionals generally agree that your shipment's replacement value is somewhere between $5.00 per pound (at the very least) and $8.00 per pound (at the most...unless you are planning on transporting high-value articles such as antiques). Therefore, a 10,000 pound shipment should be worth somewhere between $50,000 and $80,000. As of this writing our affiliated van line company insists that you purchase at least $6.00 per pound valuation. Therefore, our van line company would insist that you purchase a minimum of $60,000 valuation coverage for a shipment weighing 10,000 pounds.
$0.60 Per Pound vs. Full Replacement Valuation
In this example we will again use a 10,000 pound shipment as an example which (if the shipment experienced a total loss and you had selected $0.60 per pound per article loss/damage valuation) would leave you up to $54,000 out-of-pocket ($54,000 being the difference between your true $60,000 shipment replacement value , less the $6,000 that $0.60 per pound coverage would provide). Such a loss would harm you greatly.
Full Replacement Value (With a Deductible...or Without a Deductible)?
If you choose the mover's full replacement value option, most American moving companies offer different levels of deductible which can lower the overall cost of full replacement value coverage. For example, $60,000.00 full replacement coverage with no deductible may have a cost of $626.00 while a $250.00 deductible level may cost $428.00 and a $500.00 deductible level may cost only $361.00. Deductibles are applied one-time to your total damage claim.
Homeowners Insurance Coverage During Your Move
If you have homeowners coverage in effect during the period when you are moving you may have coverage for your household good and personal effects while they are in the care and custody of the moving company. However, this coverage is most likely limited to catastrophic loss coverage. In order to determine if you have such homeowners coverage you must contact your homeowners insurance broker.
It would certainly be wise to ask your mover or self-move company "what kind of insurance is included in your price," and to inquire as to the additional cost of full replacement value coverage.
At the very least, you should go into your relocation knowing exactly what you are covered for, and precisely what your potential loss might be if your shipment experiences damage or that a once in a lifetime catastrophic loss.
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