Update to the Moving Insurance Policy

Update to the Moving Insurance Policy

Moving entails a lot of effort, time and energy. And to add to all that, it also involves a lot of risks. There’s the money that you have to spend, the relationships that you will be putting to the test, the memories that you will be transferring from once place to another, job security, and all in all, leaving the comforts of the life that you were used to. Another thing that poses great risk to people who are planning to move is the risk that is put on their belongings. Relocations are a tricky ordeal and if not handled properly, furniture can get chipped, appliances can get broken, and if you’re really unlucky, some items can get lost.

Don’t freak out just yet. A lot of moves end up successfully too, although of course, you can never really say when an accident will happen.

That’s why moving companies are required to offer insurance coverage.

On the simplest level, movers are of course held liable for the goods that they will transport. However, the degree of their liability and the amount of reimbursement will vary depending on what type of coverage you avail and pay for. That’s why it’s important to know the various types of protection available for you.

Two Required Types of Protection

Before, there was only one type of protection that is mandatory for moving companies. This has been amended and now there are two options for consumers: 1) Full value Protection and 2) Released Value

1. Full Value Protection –

   Under this option, the moving company you hire will be liable for replacing the value of lost or damaged goods in your entire shipment. This is a more comprehensive protection plan for your belongings. This is basically the default option offered by movers, unless you tell them that you want the other type of coverage which is based on the Released Value.

   With Full Value Protection, should any item get lost, destroyed or damaged during transport (under their custody), the company will offer to do one of the following for each article:

   • Repair the damaged item
   • Replace the lost or damaged item with a similar piece
   • Give a cash settlement for the cost of repairing the item, or for the cost of replacing the item under the current market price

   Take note that movers are allowed to limit their liability for loss or damage to items of extraordinary value (high value items). That is unless you specifically list the items you want covered in the shipping documents. Items that are considered of extraordinary value are basically those which exceed $100 per pound. Examples would be jewellery, china, silverware, antiques, fur coats, etc.

   As a last reminder, Full Value Protection is offered by all companies but it is not free. Full protection for your goods entails additional charges.

2. Released Value –

   Released Value Insurance is the most economical option for protection because it is offered at no additional cost. Take note however that the protection it offers is quite minimal. Basically, under this protection, the moving company assumes liability for no more than 60 cents per pound per article.

   For example, if your mover damages a $1,000-worth home theatre system that weighs 10 pounds, the computation would be 10 pounds x $0.60 which will amount to a not so exciting $6.00.

   But that’s what you get for coverage that doesn’t involve any additional cost. Released Value coverage can be availed by simply signing a statement on the bill of lading, saying that you want to avail it. Again, Released Value protection gives you compensation based on the weight of the item and not its value.

   If you don’t choose Released Value Protection, the company will automatically consider you for Full Value Protection level of liability wherein your items will be assessed for the corresponding charges.

It’s important to note that Full Value Protection and Released Value Protection are not governed by State insurance laws, but are instead under the Federal contractual tariff levels of liability which is issued under the Released Rates Orders of the Surface Transportation Board of the Department of Transportation.