Understanding moving insurance options
Whether your drinking glasses are
Waterford crystal from Ireland or the weekly special from Wal-Mart,
you'll want to be reimbursed if they break during the moving process.
There are a variety of coverage options to consider when you've
decided to relocate.
First and foremost, check your
homeowners policy to see what, if any, coverage it offers. Mike
Chrysler of the Indianapolis-based Insurance
Institute of Indiana says most homeowners' policies will offer
some coverage during a move, but only for the "main perils"
they would cover while the merchandise was in your home -- such
as fire or theft.
"Your homeowners policy does
not cover the shifting and breaking of any articles while in transit,"
Homeowner's policy often not
In addition, your current policy may stipulate that coverage is
reduced during a move, says Sue Nudd of Mason-McBride Insurance
Company in Troy, Mich.
"You can't make a general statement that if you
have $100,000 coverage now you'll automatically have the same coverage
in your move," Nudd says. Some policies might limit coverage
to 10 percent of the current policy.
Another thing to consider, according to Nudd, is that
some policies limit personal property coverage to 50 percent or
75 percent of the homeowners policy -- and that might not be enough.
"Over the years, you've accumulated more in the way of clothes,
furniture, etc.," Nudd says. "You might not realize how
much personal property you have until an inventory is taken."
Nudd suggests adding endorsements, riders or enhancements
to your current policy or consider insurance coverage offered by
Movers must assume some liability
All interstate movers charge 4 percent of the transportation cost
for property and casualty insurance. It doesn't affect the insurance
valuation options you may select, says Mary Scott Tuck of the American
Moving and Storage Association. The P&C was added by the Department
of Transportation to help offset costs of insuring trucks post Sept.11.
In addition, all interstate movers are required to
assume liability for personal property at a rate of $0.60 per pound
at no cost to the customer. It's usually called "released value"
coverage. Most customers would probably find it inadequate, to say
the least. If the mover bounces your 45-pound television down the
concrete steps in front of your house, you'll be reimbursed only
But, believe it or not, there are times when $0.60
a pound coverage is OK, says Tuck.
"If you have a homeowners policy that covers
the moving of furniture or if you're a college student -- we all
know what our furniture looked like right when we came out of college,"
she says. If it's not catastrophic to replace, the $.60 per pound
might more than cover your loss.
Coverage levels vary
But peace of mind for most of us will cost more than $0.60 a pound.
Here, according to the association, are some other coverage levels
most moving companies will offer. Coverage amounts are subject to
change and may vary according to state regulations, so check with
your mover for the latest information.
- Declared value:
The value of your shipment is based on the total weight of the
shipment times $4 per pound. If your belongings weigh 5,000 pounds,
the mover would be liable for a maximum of $20,000.
- Lump sum value:
If the value of your shipment is greater than $4 per pound, you
can get additional coverage by declaring a specific dollar value.
If you say your 5,000-pound shipment is worth $100,000, you'll
be charged a flat rate of $76 per $5,000 of assessed value.
- Full value protection: Items
that are lost, damaged or destroyed will either be repaired, replaced
with a similar item, or a cash settlement will be made based on
current market value of the item. Depreciation is not a factor
in this type of coverage. The cost of full value protection varies
from mover to mover and there is usually a minimum coverage level.
Deductibles of either $250 or $500 are common unless a customer
is willing to pay extra.
Most go for full value
If you're wondering what the most popular coverage is, according
to 2001 figures compiled by the American Moving and Storage Association,
most people opt for full value coverage without a deductible.
Understand that movers don't issue insurance polices,
they offer "valuation coverage." Tuck says it's similar
to an insurance policy but no physical policy is written. "It's
a valuation option or a liability option as opposed to true insurance
issuance. You don't get a policy, you get a bill of lading -- which
is a contract between mover and customer."
What if you packed the boxes yourself? According to Tuck, if the
mover accepts them they're covered at whatever valuation option
you picked. Some movers may want to open boxes that contain fragile
items to make sure they're properly packed.
If a box is marked "crystal" and the mover
hears "clink, clink, clink," he may go "Oh, oh, oh,"
open it up and repack it. And that's going to cost you more money.
If the moving company packed your boxes, Tuck says
you may not be covered if items are damaged after the packers leave
and before the movers arrive. In other words, "If the packers
came and went and Junior knocked over a box and things broke."
Take problems up with local
Speaking of things breaking: What do you do if you arrive at your
new home and something in a box goes clink, clink, clink?
The association's Tuck says many moving companies
now allow the drivers to settle broken items up to $250 in value.
For items over that amount or missing items, customers need to check
the bill of lading for the "destination company." More
than likely that's the local agent for your moving company.
"Claims aren't recognized unless they're
in writing and specify the item that was damaged and its approximate
value. Normally, the customer has nine months from date of delivery
to complete the forms and return them," says Tuck. "It
is, however, a good idea not to wait until the last possible minute
to file a claim. As soon as you have finished unpacking and have
had a chance to inspect your belongings, begin your claim process
If the problem resulted from packing damage,
don't destroy or dispose of the box until the moving company tells
you it's OK.
Tuck says the moving company will send an inspector
who will usually recommend repairing or replacing the item, or offering
a cash settlement.
"If the customer doesn't like the offer, they
can go back to the company and say, 'Listen, this is a starting
point but not where we want to end up,' " says Tuck.
At that point the dispute would go to the company's
headquarters, which would send it to arbitration if the disputed
amount is less than $5,000. The association acts as a conduit between
the customer and the moving company and sends the dispute to the
Arbitration Forum. If the amount in question is more than $5,000,
it could still go to arbitration if both sides agree -- or the customer
may want to take it to court.
-- Posted: July 7, 2004