As with all forms of insurance, the answer to this question boils down to money and statistics. But both of these factors suggest moving insurance is a better idea than most people think. The Department of Transportation registers 4,000 complaints annually, while the Better Business Bureau has seen complaints against moving companies nearly triple in the last decade. At the same, while the exact cost of buying policies will vary considerably, the average cost is usually less than 1.5% of the value of your goods. That said, you need to be fully informed about this type of insurance before make a decision. And it’s more complicated than you think. Here are some of the facts you need to know when considering whether moving insurance is right for you and which kind.
Moving Insurance Myths
- Many people mistakenly believe their belongings are covered from loss and damage through their homeowners insurance. Most homeowners’ insurance policies do not provide coverage for your household goods for moving purposes, although you should check with your agent. Often, you will find that goods are covered against damages while the movers are in your home packing, but not while the goods are in the movers’ possession.
- Ok, but the moving company itself makes guarantees against lost or damaged items, right? Only to a certain extent and often less than you think. They provide valuation for your items. Essentially, if they are found liable, they will pay you a certain percentage of the value of your goods. Most often, these companies pay per pound, usually $.60 per pound (not a good idea if you’re moving stereo equipment, musical instruments, etc.). Sometimes, they provide replacement value. These valuation policies don’t provide you from “acts of God,” as moving insurance does.
- Can’t I buy insurance from my moving company? Usually not. To prevent abuse and scams, in most states moving companies are prohibited by law from selling insurance.
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Types of Moving Insurance
To be sure that your goods are protected each step of the way, including if your belongings need to go into storage, you must purchase an actual moving insurance policy. Here are two main policy types:
Full Replacement Value – Valued Inventory—is offered for Interstate (moving from state to state), Intrastate (moving within the same state) and International shipments. It provides coverage based on an itemized and valued inventory prepared by the assured (the customer buying the policy) prior to the shipment date. Please note that the value assigned to the articles should be the cost of replacement at your new destination. Any settlement based on this type of coverage would be the lesser of repair costs or the amount declared on the valued inventory.
Example: You have purchased a sofa in 1999 for $400. The current replacement value to purchase a like/kind sofa is $900. You should list the sofa’s value at $900. If you list the value at the $400 purchase price, and the sofa is damaged or destroyed during the move, you would be limited to a maximum repair or replacement settlement at the amount you declared on the high value inventory.
This option is the most comprehensive and is the best coverage available, as it does not reduce the settlement amount for depreciation or a co-insurance penalty. This completed inventory could also act as a base for your Homeowners’ or Renters’ insurance policy at the new location.
Full Replacement Value – Lump Sum—is offered for Interstate (from one state to another) and International shipments only. This option provides coverage based on the total declared value/lump sum of the shipment. To avoid being under insured, it is required you declare a value equal to at least $8.00 times the total weight of your shipment and that high value items be specifically declared and valued. In other words, if your shipment weighs 3,000 pounds, you need to insure it for a minimum of $24,000 and indicate the individual value of your high value items.
With this option, items valued at less than $500.00 per item do not need to be specifically declared and listed on the inventory list, however, to be sure that these items are covered, you MUST include their value in your total Declared Value.