Moving insurance

Moving insurance: All you want to know

Relocating your home can be intimidating. You are moving your cherished belongings from one place to another, or more likely, paying someone else to move them. It’s nerve-wracking to watch strangers load your stuff into a truck and drive away with it. What if something goes wrong?

What kind of coverage should you get to protect yourself from loss?

Whether you are moving a short or long distance, you should carefully consider the type and amount of coverage you obtain to protect your household goods. Your mover will offer you coverage, which may or may not be adequate. Whether you pack your personal items or have the movers do it can also affect the protection you have.

Let’s start with the basics. If you are moving from one state to another (called an interstate move), your moving company is subject to the Federal Motor Carrier Safety Administration (FMCSA). If you are moving entirely within one state, it is still a good idea to choose a mover that adheres to these standards, such as a company affiliated with a national van line, or another reputable organization that has a DOT motor carrier number. Another good indicator is a membership with the American Moving and Storage Association. Most states, including California, regulate moving companies’ actions similarly to the FMCSA.

FMCSA registered movers will provide you with an estimate that includes an explanation of the protection options that are available to you. Your mover is legally liable for any loss or damage that occurs during the transportation of your shipment, and the provision of all services that are identified on the Bill of Lading, whichis your contract, presented to you on moving day. FMCSA specifies the Bill of Lading elements, including evidence of any insurance coverage purchased on your behalf, including the amount paid by the mover.

You will select coverage after reviewing the options provided to you with the estimate. Estimates must include the cost for Full Value Protection, also called Replacement Value Coverage. This is the default option and is the level of coverage your shipment will have unless you choose otherwise. It is not free and can be costly. But it is the coverage that will best protect your cargo. Full Value Protection provides that anything lost or damaged in the custody of the mover will be repaired by, replaced by, or paid to be repaired or replaced by the mover. There are exceptions that need to be detailed in the mover’s tariff to apply, andthere may be a deductible.  

Full Value Protection is determined either by the federal minimum of $6.00 per pound, or by a higher per pound minimum as established by your moving company, or by the declared value you set for your shipment. Even with Full Value Protection, the mover can limit its liability for loss or damage to individual items of exceptional value (over $100 per pound) unless those specific pieces are identified in advance and accepted by the mover. Jewelry, furs, antiques, silverware, and computer software are potential candidates for exclusion due to extraordinary value. It is up to you to review the mover’s tariff and declare items of concern.

The cost depends on the moving company, the distance, and of course, the weight, but generally, you can negotiate to have the coverage based on the declared value of the shipment and set at a cost around 1%. If your shipped possessions are worth $50,000, the coverage cost would be $500. Remember that you must specify individual items that are worth more than $100 per pound, and if you have many small items (such as jewelry), this can be a time-consuming process.

Do I have to pay for coverage?

The moving company will offer you an option to choose lesser coverage, called Released Value Protection, which is included with your move at no additional cost to the consumer. This choice requires that you waive your right to the Full Value Protection and accept a valuation of $0.60 per pound for the shipment. If your 20-pound flat-screen television monitor is lost or damaged, the mover will reimburse you at a rate of $0.60 per pound, or $12.00. Think very carefully about that. Even with professionals loading the truck and handling the move, things do go wrong, and if your goods are damaged, replacing them can be very costly. If it isn’t worth protecting, is it worth moving?

Those two levels of coverage are reimbursement by the mover for any loss or damage, not insurance. Your mover may also offer you third party insurance coverage, but it does not have to do so. Suppose you purchase separate third-party cargo liability insurance from or through your mover. In that case, the mover must issue a policy or other written record of the purchase and to provide you with a copy of the policy. You can find and purchase insurance coverage on your own, but third-party coverage, whether obtained through the mover or own your own, will typically be excluded from the FMCSA arbitration process. 

What can limit my ability to recover damages?

If you chose the Released Value Protection, but your goods are worth more than $0.60 per pound, you will be unable to collect your loss’s full value. If you purchase the Full Value Protection, your reimbursement may be subject to a deductible. If you have the Full Value option but declared a valuation that is less than the actual value of your shipment, you will be unable to recoup the full amount. If you fail to report individual items of value greater than $100 per pound, they will not be fully reimbursed.

It is essential to be aware that movers are not responsible for items in boxes they did not pack. If you do your own packing, and something is broken in a box, unless the box shows significant damage that can be attributed to the movers, you are not likely to be covered for damage. The mover may refuse to transport certain fragile items unless you engage their services to adequately prepare them for moving. Artwork, antiques, and other delicate and expensive objects are subject to refusal without expert preparation.

Packing prohibited items such as hazardous materials, perishable items, flammable, or any other dangerous material will void your coverage.

The moving company is not liable for damage caused by natural disasters such as fire, hurricane, tornado, windstorm, hail, or earthquakes.  Also, if items are damaged while in storage that is not controlled by the moving company, you are not covered, though you should have separate coverage from the storage facility. Your homeowners’ or renters’ policy may provide minimal coverage for items damaged in transit, but nothing if the movers’ actions cause the breakage.

When you receive your delivery, carefully review the document you are signing to ensure that you are not releasing liability. Federal regulations provide you with nine months to examine your shipment and file a claim for anything missing or damaged. Still, if you sign a document with language to the contrary, your case may be challenging to establish. Once you determine that you have suffered a loss, file your claim promptly, and substantiate it with the pictures you took of the item before shipment.

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