Everyone wants to think that their move will go smoothly. What if it doesn’t? What if the moving truck crashes? What if your priceless 18th century dining room table gets broken? These situations are what moving insurance is for. Insurance is boring, but you should at least know enough to protect your belongings during a move.
Don’t All Movers Include Moving Insurance?
Most moving companies will advertise that they are “Fully Licensed, Insured and Bonded” without going into the details of their actual policies. There are two concerns: damages to your residences and damage/loss of your belongings. All moving companies are legally required to offer $0.30/lb of insurance for local (within a state) moves. For interstate moves, companies are required to provide $0.60/lb of insurance. This insurance is typically called Basic Limited Liability Protection or Released Value Protection on any moving paperwork.
If your $3,000 55″ 4K LED TV that weighs 20 pounds is broken during your move, with the default insurance, you will get reimbursed $0.30 * 20 = $6 or $0.60 * 20 = $12 for your loss, depending on if it is a local or interstate move. So while your move is “technically” insured, it might as well not be.
The legal maximum exposure is $2,500 for this required insurance, which works out to 8,300 pounds lost/damaged for an in state move, or 4,150 pounds of goods lost for an interstate move. Unless you’re moving rocks, your belongings probably weigh less and are worth more.
Full Replacement Value Coverage
Full replacement value moving insurance will cost extra, but it provides a more realistic compensation schedule in the event one of your possessions is broken or lost during the move. Typically with this level of coverage, the insurer will be responsible for costs to repair, replace or offer a fair market value cash settlement. The premium is typically around 1% of the accessed value, so insuring $60,000 of items will cost around $600.
While this coverage level is the most comprehensive, the individual must still prove that the damage/loss was directly caused by the mover. This means it is good practice to photograph and document all of your belongings prior to your move. All items to be insured must be identified and listed with a value attached to the bill of lading. If an item is not included on this list, it isn’t actually insured. The simplest way to list all of your items is to photograph each room in your house, then sit down and make a list of every item in the photograph that you’d like to be insured, keeping note of the replacement value of each item you include.
If the mover doesn’t pack a box, they aren’t responsible for damage, unless the entire box was damaged in transit. Pack well or let the professionals pack your fragile belongings.
Lump Sum Value
A lump sum value is related to the basic limited liability protection in that the total weight matters, but requires you to assign a value to each item (typically only items with a replacement cost over $1,000) to be attached to the bill of lading. You will then pay an insurance premium from 0.5%-2% of the total value, based on the total value of the shipment. To get an estimate of the coverage you need, sum the value of your belongings and divide by weight, so if you have $25,000 of belongings that weigh 3,600 lbs, the value is ($25,000/3,600) $6.94/lb. You would then need to insure your belongings for at least this rate. Most companies suggest a minimum of $8/lb of coverage to minimize the risk of being underinsured.
Total Loss Only
What if the moving truck catches on fire and is thrown into the river by a tornado? Chances are, your stuff is gone. Total Loss Only is a policy specifically designed to cover the event that all of your belongings are lost/damaged. This type of policy will only cover your loss if all of your items are lost/damaged beyond repair.
Does My Homeowner’s Insurance Cover My Move?
Typically, a homeowner’s insurance policy does not cover items while they are being transported. Items are much more likely to be damaged or lost while being moved, so the policies will vary from insurer to insurer. The easiest way to find out if your belongings are covered during your move is to contact your insurance agent and ask. If they aren’t covered, most companies will be able to offer you moving insurance.