Most renters and homeowners insurance policies usually do not cover the cost of damaged or lost possessions due to a move. And since moving leaves your belongings exposed to a variety of potential problems, moving insurance might be worth taking a look at.
When we hire professional movers, we can’t control what happens to our boxes and belongings once they’re out of our hands. That’s why moving insurance — or moving valuation or coverage, because moving companies do not actually offer insurance — is something to consider when you hire a moving company.
What Is Moving Insurance?
A moving insurance policy covers your belongings if they are lost, stolen, damaged or destroyed during your move. Moving insurance might cover repair or replacement or offer a cash settlement depending on the situation and the type of policy.
The most common way to obtain moving insurance is through a moving or truck rental company. Policies are also available from third-party insurance companies.
Moving insurance covers losses or damage to your possessions during a move. Because moving puts your possessions at risk of damage and theft, a moving insurance policy can help reimburse you for any mishaps during the moving process.
Since there are many different ways to move, there are also various coverage types available to protect your belongings.
Types of Moving Insurance for Professional Movers
If you decide to hire movers, they are generally responsible for the items you have them transport. However, if you are moving to a different state, moving companies are required by federal law to offer two types of coverage. The type you select will determine the reimbursement you’ll receive if any of your items are lost or damaged.
Full value protection
Moving companies must offer full-value protection (FVP) that covers the full replacement value of your belongings. Although it costs extra, FVP is the default coverage and must be included in your initial quote.
The moving company will address lost, destroyed or damaged items in one of three ways:
- Repairing the item
- Replacing the item
- Paying a cash settlement equal to the item’s full market value
Full-value protection comes with one huge caveat: It does not cover items worth more than $100 per pound, known as items of extraordinary value. However, the moving company is still responsible for safely delivering any high-value items listed on the shipping documents. If you have questions about what FVP does and does not cover or how it works, you can ask your moving company for a written explanation.
The exact cost of this coverage depends on the estimated value of the items covered. For instance, a company may price its FVP at 1% of the value of your belongings. Companies also differ in how they value your items. They may use a simple formula, such as $6 per pound, or allow you to declare an estimated value.
FVP policies include a deductible. The lower the deductible, the higher the cost. Some companies allow customers to set their own deductibles. For instance, JK Moving Services offers four deductible options.
With full value protection, your mover is liable for the total replacement value of your lost or damaged possessions in your shipment.
Released value protection
As an alternative to FVP, the federal government requires interstate moving companies to provide released-value protection that covers up to 60 cents per pound per item. There is no added charge for this coverage.
To understand the inadequacy of released value protection, consider that a Macbook Air weighs less than 3 pounds. If you rely solely on this basic coverage, you would receive less than $2 for a laptop that will cost $1,000 or more to replace.
Because the terms of this protection are less favorable, you will be required to sign a statement agreeing to it. Your bill of lading should include a section that notes your choice to forgo FVP.
This coverage is offered at no additional cost but provides only minimal protection. With released value protection, you’ll receive up to 60 cents per pound for an item. Therefore, if your five-pound computer is valued at $600, you would only receive $3 if your item is lost or damaged (60 cents * 5 pounds).
Some movers, such as International Van Lines, offer more comprehensive policies through a third-party insurance company. Also known as separate liability coverage, this insurance supplements the complimentary coverage provided by the moving company. The extra expense of a third-party policy might be worthwhile if you have several items of extraordinary value.
If you opt for this additional coverage and need to file a claim, the moving company will pay up to 60 cents per pound per item according to its released value protection. The third-party insurer will then cover the rest of the loss up to the coverage limits of the policy you purchased. If your moving company does not offer third-party insurance, you can seek out a policy yourself.
Remember that while valuation coverage is governed by federal law, third-party moving insurance is regulated at the state level.
Separate liability coverage
Some movers also offer separate liability coverage through a third-party insurance company for an additional charge. While your mover is still responsible for the released value protection, which covers only up to 60 cents per pound, this additional insurance policy will cover the rest of the loss up to the policy limits.
If you decide to purchase the extra moving insurance through the movers or from a third-party provider, make sure you get the coverage details in writing and understand what’s covered and excluded.
Types of Moving Insurance for DIY Moves
If you go the DIY route with your move, you can purchase moving insurance directly from an insurance company. You may also have one or two other coverage options, especially if you plan to rent a moving truck or portable storage container.
Rental Truck Coverage
Truck rental companies offer optional moving coverage, similar to the insurance coverage offered by full-service movers. Common types of coverage include the following:
- Limited damage waiver: This covers accidental damage to any rented equipment. Some exclusions apply.
- Cargo accident protection: This covers cargo (up to a certain amount) that is lost or damaged due to an accident or natural disaster.
- Supplemental liability coverage: This provides up to $1,000,000 worth of coverage for property damage and personal injury.
- Medical/life insurance: This covers accidental death or injuries you and your passengers sustain.
In addition to these options, many companies also offer roadside assistance or towing insurance.
Container and Contents Protection
Companies such as PODS and 1-800-PACK-RAT rent portable storage containers that can be used to complete long-distance or local moves. Like truck rental companies, they offer damage waivers for the rented equipment. They also offer content protection plans to cover your belongings up to a certain amount.
Your quote may include some coverage, but options and terms vary by company.
The supplemental liability coverage some rental companies offer is a form of third-party insurance. You can also purchase relocation or trip transit insurance directly from an insurance company, regardless of whether you rent equipment. Coverage and exclusions vary — read the policy carefully to understand the exact terms.
Your homeowners’ insurance policy may cover your personal belongings as you transport them to your new home. This type of coverage is not common, but it’s worth checking before you shell out money for additional moving insurance.
If your existing homeowners or renters insurance policy does not cover your items during transit, ask if the company will allow you to add moving coverage. This may be cheaper than purchasing moving insurance from a separate insurance provider.
What Does Moving Insurance Cover?
As noted above, coverage depends largely on your policy type. The exact terms will also vary from one company to another.
In general, the valuation policies offered by interstate moving companies cover the following:
- Belongings damaged by the movers during packing or unpacking
- Belongings damaged during loading or unloading
- Loss, theft or damage that occurs in transit
- Damage that occurs during any other service provided by the mover
Companies differ in how they value your shipment, but the minimum coverage for full-value protection is $6 per pound. Some companies have a higher minimum value or allow you to declare the full value of your shipment. Released value protection, meanwhile, covers no more than 60 cents per pound per item.
Third-party moving insurance offers higher coverage limits than valuation coverage. It also covers more types of damage, including natural disasters and other things outside the movers’ control. Read the policy documents carefully to determine exactly what is covered.
What Does Moving Insurance Not Cover?
Some circumstances may limit your mover’s liability and make buying moving insurance more attractive. This includes:
- Packing any perishable, dangerous or hazardous materials without informing your movers of these items
- Deciding to pack some of your own items to save money may make it challenging to submit a claim if the items are damaged due to your own packing efforts
- Failing to inform your mover in writing if any items hold significant value
- Damage from natural disasters, such as a tornado
Also noteworthy is that if you’re not moving to a new state, you may want to check with your state, county, or local consumer affairs agency or state moving association to verify local mover rules and regulations. Each state may have a different set of liability and valuation requirements for movers.
How Much Does Moving Insurance Cost?
The cost of moving insurance will depend on factors such as the value of your possessions and the type of coverage you select. If you choose basic coverage or released value protection from your mover, it’s typically free with your moving agreement.
If you select full-value protection moving insurance, you can expect to pay about 1% of the total estimate of the value of your personal belongings.
The cost of moving insurance from a third-party insurer may be between 1% and 5% of your valuation estimate. Therefore, if we use the estimate above, the cost would be between $180 and $900 for coverage.
Your moving insurance cost can also depend on three factors: the type of coverage, the value of your belongings, and the deductible.
When you hire an interstate moving company, released value protection is included with your move at no additional charge. It does not have a deductible but offers minimal coverage.
The exact cost of full-value protection varies but is based on the estimated value of your items. For instance, a company may price its FVP at 1% of the value of your belongings.
Keep in mind that FVP policies include a deductible. The lower the deductible, the higher the cost. Some companies allow customers to set their own deductibles. JK Moving, for instance, offers four deductible options ranging from $0 to $500. A plan with a $0 deductible costs $1.05 per $100 of value, while a plan with a $500 deductible costs only 50 cents per $100.
You can typically expect third-party insurance to cost 1%–5% of the value of your belongings. Companies may differ in how they determine the value of your belongings. Although third-party insurance can end up costing much more than FVP, it offers much more protection.
Do I Need Moving Insurance?
Moving insurance will lower the out-of-pocket cost to repair or replace household goods that are lost, damaged, or destroyed during your move. Minimal coverage in the form of released value protection is included in full-service interstate moves. However, this type of policy will not cover all or even most of the value of your belongings.
If you are planning a long-distance move, full-value protection or third-party moving insurance may be a wise investment — both financially and for your own peace of mind. The latter is recommended if your move includes valuable items, such as jewelry or fine art, that would be excluded under an FVP policy.
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