Do I need moving insurance? (Guide 2022)

0

Although moving companies cannot sell insurance policies, federal regulations require them to offer two liability options: paid-up value protection and full value protection. These policies are technically classified as valuation coverage or rolling coverage. You can also purchase genuine moving insurance from a third-party insurance provider.

Integral 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 should be included in your initial quote.

The moving company will deal with lost, destroyed or damaged items in one of three ways:

  • Item Repair
  • Item Replacement
  • Cash settlement payment equal to the full market value of the item

Total Value Protection comes with a huge caveat: It does not cover items valued over $100 per pound, known as Extraordinary Value Items. However, the moving company is still responsible for the safe delivery of high value items listed on the shipping documents. If you have any 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 covered items. For example, a company may price its FVP at 1% of the value of your goods. Companies also differ in how they rate your items. They can use a simple formula, like $6 a pound, or let you 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 example, JK Moving Services offers four franchise options.

Protection of released value

As an alternative to the FVP, the federal government requires interstate moving companies to provide paid-up value protection that covers up to 60 cents per pound per item. There is no additional 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 on this basic coverage alone, you’ll get less than $2 for a laptop that will cost $1,000 or more to replace.

The conditions of this protection being less favourable, you will have to sign a declaration of acceptance. Your bill of lading must include a section indicating your election to waive the FVP.

Third party insurance

Some movers, like International Van Lines, offer more comprehensive policies through a third-party insurance company. Also known as separate liability coverage, this insurance supplements the additional coverage provided by the moving company. The extra expense of a liability insurance policy may be worth it if you have multiple 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 based on their paid-up value protection. The third party insurer will then cover the remainder of the loss up to the coverage limits of the policy you have purchased. If your moving company does not offer liability insurance, you can take out one yourself.

Remember that while appraisal coverage is regulated by federal law, third-party moving insurance is regulated at the state level.


Share.

Comments are closed.