What Moving Insurance Actually Does (and Why It Might Not Help You)

Posted in: I'm Moving, Money Saving, Moving Checklists & Planning

So you’re moving and you’re worried about your stuff arriving dented, broken, shattered and splintered… you’re definitely not alone. But you’re also not sure what kind of insurance to get, right? You’re still in good company.

To be precise, moving companies don’t offer insurance, exactly. They offer liability coverage. Let’s talk about the differences and what that actually means.

How You Can Protect Your Stuff When You Move

First, the good news: the FMCSA requires all moving companies to assume liability for lost or damaged goods they transport. The bad news? This may not be what you think it means.

Moving companies are legally required to offer two levels of coverage:

Released Value Protection 

“Released Value Protection” is borderline meaningless in terms of your being reimbursed for loss or damage. Plainly stated, you get a whopping 60 cents per pound for any item of yours that goes missing or shows up in splinters. So what do you get if your mover destroys that 25 pound flat screen TV you paid $1,200 for? Hold your nose and do the math. 

Again, Released Value Protection applies to everything you own, across the board. Even your items that would be declared as “high-value” under Full Value Protection would be covered at that same sixty cents per pound. Honestly, just take your jewelry and designer handbag with you in your car. (Your electronics may have to remain solely under their hopeful protection.) If you decide you’re okay with this free level of protection, it’s your call.

Full Value Protection

“Full Value Protection” on the other hand is the more comprehensive level of liability coverage. It’s where the mover is responsible for replacing, repairing or making a cash settlement for any loss or damage that occurs during your move. (Be aware, the mover – not you – gets to decide on the manner of resolution.) This level of coverage comes at a cost (you’ll have to ask your mover their rates), but it offers peace of mind as you watch your movers load your big new flat screen TV onto their truck. There are also plenty of caveats to this sort of coverage, which we will get to in a moment.

One important (and sometimes overlooked) part of Full Value Protection is that it still involves this thing called the “High-Value Inventory Sheet”. This is a form where you list any and all items of extraordinary value, i.e., items with a monetary value of more than $100 per pound. Basically, these are things like jewelry, smaller electronics or your designer handbag. Neglecting to write these on your list limits your mover’s liability of any item to just $100 per pound (the industry standard; check with your mover as to their specific policy).

What “Full Value Protection” Doesn’t Get You

This is a huge caveat: Your movers will not be liable for damage to any contents of any container you packed yourself. For one, you may not have packed those contents properly. And two, items you packed may have already been damaged. Regardless of reality, your movers will be entirely free from liability here.

Your movers can also release themselves from liability if you include hazardous, flammable, perishable or otherwise “non-allowable” items in your shipment without informing them. True, your movers may then tell you they won’t take your fireworks collection, but the safety of your shipment, not to mention the truck and your movers, is paramount.

You are only covered for the amount you declare your entire shipment to be worth. Since you have to pay for Full Value Protection according to the value of your goods, the higher the total value, the more your coverage will cost. Skimping here will only lessen your reimbursement if the worst happens.

And FYI, you must file any and all claims for loss or damage within 90 days of receiving your shipment at your new home. This may sound like a long time, but when you are busy settling into your new home and your new life, three months can go by pretty quickly. (Besides, how many boxes of stuff do you still have that you haven’t even opened since your last move?!)

Purchasing “Real” Insurance for your Stuff

Yes, now we will use the word “insurance” because that is what you get when you want something better than the coverage your movers offer. Just know that any insurance coverage you purchase will come from a third party insurance company. This will involve the third party’s rates, rules and deductibles. However, you can often purchase this third-party insurance through your movers, who are then required to supply you with a copy of this third party policy, along with any and all related documents. If they fail to do so, they assume liability for any claim of loss or damage. Don’t put this to the test though! Get your hands on a copy of your third party policy and make sure to read it carefully.

Covering Yourself

When it comes to the protection of your belongings, moving companies will often follow and adhere to the industry standards of Full Value and Released Value. But don’t hesitate to ask about their specific policies. Your movers are also required by law to provide you with a pamphlet titled “Your Rights and Responsibilities When You Move. On top of providing additional details regarding your mover’s liability, this pamphlet offers information on estimates, paperwork, collection of charges, transportation and resolving disputes. If you aren’t given one, guess what? You can download a copy right here.

You can’t control what happens to your stuff once it’s in your mover’s hands. But you can control – at least in part – what happens when something is lost or damaged. Your first step is just knowing what your options are.

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