The ABC's of moving insurance

Christopher Noblit
About Moving Insurance

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 shipment, you should carefully consider how to best protect your belongings and which insurance option best meets your needs. After all, accidents happen and when they happen it pays to be prepared.

To start, it should be noted that moving companies generally 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" it has several distinct differences and it is incorrect to refer to movers valuation as "insurance." Here is an article which explains the difference between mover's valuation and insurance which should help you understand the differences between the two 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.
  • Catastrophic Loss Coverage: Provides coverage for specific catastrophic events (such as a fire) in which a total loss of the shipment is experienced.

Self Moves
Companies which offer "self moves" (moves where the company provides the containers or trucks which you load and unload) do not generally offer cargo insurance 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 most 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. 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). 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 $450.00. 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 $4.00 per pound and $8.00 per pound. Therefore, a 10,000 pound shipment should be worth somewhere between $40,000 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 our-of-pocket ($54,000 being the difference between your true $60,000 shipment replacement value (less the $6,000 of $0.60 per pound coverage you selected). Such a loss would harm you greatly.

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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