With all the chaos surrounding a move, insuring valuables can become an afterthought. However, a relocation can be difficult on a client and on their belongings, and insurance is key in helping protect their property.
Moving companies employ professional movers that pack and load household goods on a daily basis. They are the most qualified to ensure that valuables go undamaged, but accidents do happen.
It's often assumed that the movers will cover any damage or loss of property. That is only true to an extent.
While both the moving company and Homeowners' insurance can cover some of the damages, insureds should fully understand what is protected in case something goes wrong. Give your clients peace of mind during their move by making sure they understand moving insurance.
Moving company valuation
There are a few different types of valuation coverage that moving companies offer. Valuation is different from insurance as it is not governed by state insurance laws. They are federal contractual tariff levels of liability that are authorized under the Released Rates Orders of the Surface Transportation Board of the U.S. Department of Transportation.
If a client is hiring a labor-only moving company, it's likely that they will not offer any valuation coverage. In fact, it is incredibly rare to find labor-only companies that offer any protection at all.
Boxes that clients pack themselves will have different liability coverage than boxes packed by the moving company. (Photo: iStock)
Also, boxes that clients pack themselves will have different liability coverage than boxes packed by the moving company. Have clients check with the moving company to explain their options in full during their in-home estimate.
The most common types of moving valuation are:
- Released Value This is the most basic coverage that every moving company is obligated, by law, to extend to clients. It is included in the price of the move. With this option, the value of goods is based solely on weight; household goods are covered for $0.60 per pound. For example, if a two-pound lamp gets broken, the owner will be compensated $1.20.
- Full Replacement Value (RVP) This is the offer to provide the full value necessary to replace damaged, lost, or stolen goods. This is the most comprehensive coverage that a moving company will provide—and it is also the most expensive. Under this protection the mover is liable for the full value of their itemized goods, minus any deductible. As one might expect, the lower the deductible, the higher the cost for coverage.The moving company will determine the value of any damaged goods and decide whether to replace the item(s), repair the damage, or offer a cash settlement. Clients who choose to waive this level of coverage in order to reduce moving costs should be aware that their level of protection is also reduced.
- High-Value Inventory If moving items that are valued at more than $100 per pound, it's important for the client to complete a high-value inventory form. This form indicates the condition of valuables prior to the move, and both the client and the driver have to sign off on it. Should anything unexpected happen and something is damaged, high-value belongings are protected. The protection amount for high-value items is entirely up to the client.
- Third-Party Insurance Coverage Consumers who choose to purchase third-party insurance will increase their compensation for lost or damaged goods. The insurance company will assume responsibility for the value of all items above the 60 cents per pound that the moving company is obligated to pay.Some Homeowners' insurance packages offer protection for items during transport. For this reason, it is recommended that clients check their policy before purchasing third-party insurance. They can usually add on moving insurance for a small fee.
The most common types of third-party insurance policies are:
- Trip Transit Insurance This covers personal property for perils including theft, disappearance, or fire while in transit or storage—but does not provide coverage for breakage. Trip transit insurance can be written for the full value of property or as excess coverage over and above that provided by the moving company.
- Generalized Replacement Insurance As covered previously, the insurance company will cover belongings over the 60 cents per pound that the moving company is obligated to pay.
- Itemized Replacement Insurance The insurance company will cover belongings over the 60 cents per pound that the moving company is obligated to pay based on an itemized list the mover provides.
- Total Loss Only This is a special type of moving insurance that is set aside for protection against a catastrophe such as a fire or flood.
Even if a client notices damage or loss after reaching their destination, they are legally bound to pay the moving company. Clients can then follow the claim procedure and file an insurance claim in order to get compensated. (Photo: iStock)
Filing damage claims
When making 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. Clients only have nine months to make a claim known to the moving company after the move is completed. So don't delay on getting all those boxes unpacked!
The moving company is legally bound to acknowledge a claim within 30 days and settle the claim within 120 days. Even if a client notices damage or loss after reaching their destination, they are legally bound to pay the moving company. Clients can then follow the claim procedure and file an insurance claim in order to get compensated.
Protecting household goods is important when facing an impending relocation. Clients should take care to read all of the papers given to them and understand all of the moving terms so that they are not in for a surprise if it comes time to file a claim.