Moving Guide

Insurance

Insurance

Moving can be even more stressful if you’re worried about what might happen if your belongings get damaged or lost by your movers.  Fortunately there are several insurance options you can choose from to cover your move. Depending on whether you are moving in-state, out-of-state or internationally, the options are limited liability valuation, full replacement coverage, or co-insurance.

Limited Liability Valuation

The most basic type of insurance is Limited Liability Valuation. This is not technically insurance since your mover is required to provide it to you free of charge.  Depending on the moving company you use, Limited Liability Valuation insurance will cover $0.10 to $0.60 per pound per damaged item.

For example, if your moving company offers coverage of $0.30 per pound per damaged item valuation, this means that if you have a 20 pound stereo system that gets damaged during transport, you will only get $6.00 in compensation. Obviously, this level of coverage will not fully reimburse you for expensive items. However, if you don’t have any extra money to spend on insurance, you know that at least you will get some amount of money if any of your items are damaged or destroyed.

Sometimes moving companies will have a clause stating that you can get either some amount of cents per pound per damaged item valuation or a total of several thousand dollars (usually around $2,500 or $5,000) for the entire shipment.  If you are being charged by the hour, you will receive a smaller reimbursement regardless of whether the shipment is insured for cents per pound or the entire shipment. If you are being charged a fixed rate, you will receive a larger reimbursement for the move. For example, even if all of your belongings are worth upwards of $20,000, you would only receive a maximum of between $2,500 and $5,000 if everything was destroyed.

If you are moving within the same state, your moving company is not required to offer you any type of insurance other than Limited Liability Valuation insurance.  If you want more coverage you will need to purchase moving insurance from a third party, but check with your homeowner’s insurance and credit cards to see if you have any other coverage.  If you have, or if you can purchase, third party insurance in addition to the already-included Limited Liability Valuation insurance provided by your moving company and your items are damaged, you will receive coverage from either the third party insurance or the Limited Liability insurance; you cannot receive payments from both. 

Full Replacement Insurance

Full replacement coverage is a type of insurance that will provide you with full compensation for damaged or destroyed items. This type of coverage generally provides insurance for individual damaged or destroyed items or a lump sum for the entire shipment. For example, if you would like $30,000 of full replacement coverage for all of your belongings, you can expect to pay between $300 (with a $1500 deductible) and $450 (with a $250 deductible) depending on the insurance company and policy specifics you choose.

A deductible is the amount of money that you will be obligated to pay for replacing damaged or destroyed items before the insurance company will begin to compensate you. A deductible is a one-time amount of money you pay per insurance policy, not per damaged or destroyed item. Generally, the less you pay for the insurance policy, the higher the deductible will be. You will most likely need to fill out a detailed “household goods valued inventory” form in which you describe each item you are having transported and its value. If you get extra electrical and mechanical derangement coverage and pair and sets coverage (see below for details), you will need to specifically list any items covered under these policies in your “household goods valued inventory”. In other words, you can’t leave your $1,000 stereo out of the “household goods valued inventory” form just because you also purchased electrical and mechanical derangement coverage.

The rules will vary by insurance policy, so make sure to get the specifics of your policy. If you choose full replacement coverage, sometimes there is an option to add stipulations to the policy such as: electrical and mechanical derangement policy and a pair and sets policy. If you get extra electrical and mechanical derangement coverage and pair and sets coverage (see below for details), you will need to specifically list any items covered under these policies in your “household goods valued inventory”. In other words, you can’t leave your $1,000 stereo out of the “household goods valued inventory” form just because you also purchased electrical and mechanical derangement coverage. The electrical and mechanical derangement policy will cover internal damage to electronic and mechanical devices, such as stereos. A pair and sets policy will cover the cost of an entire set in the instance that one item in the set is damaged or destroyed, affecting the value of the entire set. An example: a vanity set comprised of a mirror and dresser which can only be purchased together. If either the mirror or the dresser is damaged or destroyed, you will be compensated for the price of both pieces together (not just the damaged or destroyed piece).

Keep in mind that if you end up needing to claim any money for a damaged or destroyed item, you might need to provide a receipt or appraisal of the item, especially if it is very expensive. Sometimes you also need to provide proof of ownership, such as photos you have taken of the item prior to the move. These photos can also be useful for showing an item’s condition prior to the move. If the item is very expensive or you’re worried about it getting damaged, you should take photos of it from all angles.