| 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
First and foremost, check your homeowner's
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
"Your homeowners policy does not cover the shifting
and breaking of any articles while in transit," says Chrysler.
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 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 $27.
But, believe it or not, there are times when $0.60
a pound coverage is OK, says MaryScott Tuck of the American
Moving and Storage Association in Alexandria, Va.
"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, this might be one
way to do it."
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 $1.25 per pound. If your belongings weigh 5,000 pounds,
the mover would be liable for a maximum of $6,250. Settlement
is based on the depreciated value of the item. Movers charge approximately
$7 per $1,000 of assessed value for this coverage. So, if your
shipment is valued at $7,000, you'll be charged $49.
- Lump sum value: If
the value of your shipment is greater than $1.25 per pound, you
can get additional coverage by declaring a specific dollar value.
If you say your 5,000-pound shipment is worth $10,000, you'll
be charged $7 per $1,000 of assessed value, or $70.
- 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.
Depreciation is not a factor in this type of coverage. The cost
of full value protection varies from mover to mover and there
is a minimum coverage level. Usually, there are deductibles of
either $250 or $500 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 1999 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 value
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 "Uh, 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.
"Most claims aren't recognized unless they're in writing.
Normally, the customer has nine months from date of delivery to
complete the forms and return them," says Tuck.
If the problem resulted from packing damage, don't
destroy the box.
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.
Updated: August 3, 2001