And to answer the above question immediately: Because accidents can happen. Let us consider the following scenario: For instance, you’re moving from Florida to Georgia. To keep it simple, let’s say it’s from Miami to Atlanta. If we presume your driver is taking the shortest route possible, it’s still close to 700 miles. That’s more than a 9 hours drive. What can happen in 9 hours? Hopefully - nothing. Realistically, though - anything can happen during this time. Maybe someone moving in the opposite direction loses control of his vehicle. Your driver swerves to avoid him and ends up flipping the truck over and barely walking away with his life. Granted, this is a worst-case scenario. However unlikely, still a possible one. So why do you need moving insurance? Because all of your household items were in the truck. And now they’re ruined beyond repair.
For example, Authority Moving Group, as well as any other moving company, isn’t licensed to sell insurance. However, we do offer two kinds of coverage on cross-country moves. This type of coverage is valuation and functions the same as insurance. What does this mean? Simply put, the moving company accepts the responsibility to reimburse you if your goods get damaged or lost during the move.
Released value protection
As stated by the Federal Motor Carrier Safety Administration, there are 2 types of coverage moving company has to offer you. The first one is “Released value protection” and is usually included in the cost of the move. Although this is the cheapest option (ie. no additional costs included), it is also the most basic. Usually, it equals to 60 cents per pound, but this number can vary from state to state. What this means is that value of your items is calculated only based on their weight, and not on their actual market value.
For instance, if an item is worth 1000$, and weighs 100 pounds, in case of damage or loss, the moving company is only obligated to pay you 60$ (100lb x 0.60$ = 60.oo$). As you can see, there’s no mention of your 1000$ in the equation.
Full value protection
The second option you can opt for is “Full value protection”. It implies reimbursement on your damaged or lost items based on their current market value. This type of valuation is more extensive and, as such, comes with additional costs. Usually, you will have to pay a premium upfront. It may also contain deductibles, that you’ll have to pay if making a claim. If you opt for a Full value protection policy, a moving company will ask you to declare the minimum value of your goods. This value ranges from 4$ to 6$ per pound and typically applies to your household items.
Example: You declare the value of your household items to 5$ per pound, and they weigh a total of 10,000lbs. That means that you will only be able to claim 50,000$ for the entirety of the shipment if it gets destroyed or lost.
Also, in the case of damage to your items during the transport, the moving company can choose to compensate you in one of the three ways:
- Paying for the repair of the damaged item
- Replacing the damaged item with the same or similar one
- Refunding you the cash amount based on the current market value of your item
It is important to note that valuation only covers the items while in transit. In other words, from the moment they leave your old house, to the moment they are in your new house.
Why do you need moving insurance if a moving company already provides valuation?
Even if you choose to get Full value protection, your moving company can still set some liability limits. These limits are usually related to actions that are out of the hands of the movers, and include:
- Acts of God - Valuation doesn’t cover natural disasters such as floods, hurricanes, earthquakes, etc.
- DIY Packing - If you do not hire professional packers, it will be difficult to prove your claims against the movers if items get damaged.
- Items of extraordinary value - Anything worth more than 100$ per pound per article is an item of extraordinary value. Some good examples are jewelry, precious artwork, antiquities, expensive shoes, and clothes, etc. You need to notify your movers in writing about these items. Otherwise, they fall under the released or full value protection clause, depending on which option you chose.
- Not reporting loss or damage within a given timeframe - The written claim must be filed within 9 months, starting with the date of delivery.
Why do you need moving insurance provided by a third party? In short, because it can cover everything valuation doesn’t. You may choose the policy that will protect your items both in transit and in storage. Or include the clause that will even protect your shipment from natural calamities.
When should you get third-party insurance?
If you are using moving services to relocate household items that are expensive, we strongly advise you to get third-party insurance. The same goes if you’re moving lots of jewelry, unique paintings, valuable antiques or any other item that falls under “Items of extraordinary value” category. Maybe you’re moving during a prime hurricane season, and have a lot of electronics. Add a clause that will insure them against water damage. Insurance prices usually start at around 200$ and increase depending on the distance to destination, the value of the cargo and the level of deductible. As you can imagine, for extremely long-distance moves, this number can get pretty high. So if your household items are easily replaceable, full value protection might be a better option.
Moving is already an expensive endeavor. And a very stressful one. You will certainly try to find different ways to minimize expenses. Yes, you can save a few bucks by not buying insurance. But in the long run, you have to ask yourself: Is it worth the risk?