When moving to a new place, you need your household items and personal possessions to arrive safe and intact, so you can set up your new home – and your new life – quickly, easily, and without stress.
However, anything can happen during the move – from traffic accidents to loading and unloading mishaps – and your belongings can easily get lost or damaged.
In such a case, having appropriate moving insurance will be of great help – it will provide compensation and will alleviate the financial consequences of the moving disaster.
Do not assume, though, that your items are properly insured only because you’re moving with professional movers or because you have homeowners’ insurance – the liability coverage included in your moving cost is very limited and home insurance covers only listed perils (like fire and theft), not all kinds of moving damage (or it may not cover damage that occurs while the items are in transit at all).
So, to ensure your peace of mind, you need to get additional moving insurance for your items.
Find out what types of moving insurance there are and decide what kind of coverage will be best for your move.
What is moving insurance?
Moving insurance protects your belongings during the relocation process – if any of your items are lost or damaged during the move, your moving insurance will cover the cost (or, at least, part of the cost) of repairs and replacements.
The coverage provided by moving companies, however, is not “insurance” in the actual sense of the word. Moving companies are not certified to sell insurance – what they offer is valuation coverage. Yet, moving valuation acts like insurance – it covers losses or damage to your possessions during the move.
In fact, valuation protection is a level of liability that professional movers assume when transporting household items. The extent of the coverage depends on the chosen type of valuation.
Types of moving insurance
Moving companies offer two types of valuation coverage – released value protection and full value protection.
Released value protection (basic liability protection)
When you sign a contract with a moving company you automatically get limited liability protection. This basic coverage is provided free of charge (by federal law), so it will cost you no extra money.
Keep in mind, though, that this option compensates you according to the weight of the item, not its actual value, and provides only minimal protection – $0.60 per pound per article. Such coverage is, of course, highly insufficient. What’s more, the released value protection does not allow punitive damage claims.
If you decide to go with the limited liability coverage, anyway, you must sign a statement on the Bill of Lading that you agree with that type of valuation.
To have a peace of mind during your move, however, you will need better protection.
Full value protection
If you opt for full value protection, your moving company will be liable for the replacement value of every damaged or missing item from your shipment. This type of coverage is much more comprehensive and offers much better protection than the released value coverage – it pays for the cost of repairs or the current market replacement value of items that have been damaged, destroyed, or lost during the move.
The full value protection, however, is not free of charge – you need to pay extra to get this type of coverage. Besides, many full value protection policies have deductibles.
The cost of full value protection varies from mover to mover, but, as a rule of thumb, its premium is a percentage of the total estimated value of the shipment (usually 1% to 2%). This makes the moving insurance cost quite expensive – the most common level of coverage is $6 per pound, so if your shipment weighs 10,000 pounds, your goods will be valued at $60,000 in total and you will have to pay a $600 premium for full value protection. If something goes wrong, however, and your entire shipment is destroyed, you will receive $60,000 in compensation.
If you wish to, you can insure your possessions based on their cost, not on their weight – the so called assessed value protection. This type of coverage is ideal when you’re moving valuable items that don’t weigh a lot. If you opt for assessed value protection, it must be explicitly stated in the Bill of Lading.
Keep in mind, though, that even if you choose the full value coverage for your belongings, your movers are allowed to limit their liability for items of extraordinary value (items with a value that exceeds $100 per pound, such as expensive electronics, pieces of art, jewelry pieces, antiques, furs, etc.). Most moving companies will offer you the chance to purchase additional coverage for such high-value articles – if you choose to do so, the premium and the deductibles will be higher (you will need to list all items of extraordinary value included in your shipment on a High Value Inventory sheet).
Bonus tip: You’re strongly recommended to keep your most valuable items with you and, if possible, transport them in your own car or take them on the plane with you. (See also: What items to move yourself?)
In case moving company insurance doesn’t suit your needs or doesn’t seem to be enough, you can purchase additional coverage – actual insurance – from a third party.
Third-party moving insurance
To better protect your move, you may want to purchase moving insurance from a reputable insurance provider. Many insurance companies offer relocation insurance, so you can easily find a provider – and a moving insurance policy – that satisfies your requirements.
Bear in mind, though, that such extra protection won’t be cheap – moving insurance rates vary from one company to the other, but the typical premium is about 5% of the total value of the shipment. The actual moving insurance cost will depend on the type of items you want to insure, their declared value, and even the “damage history” of your movers (the premium will be higher if there are a lot of damage claims against the moving company).
When looking to buy third-party moving insurance, do some research, so you can find moving insurance companies that have a good reputation, provide quality service, and offer competitive prices. Keep in mind that, in most cases, the moving insurance policy will have to be signed a month in advance of your move.
Bonus tips:
- If you have homeowner’s insurance or renter’s insurance, be sure to talk to your insurance provider to find out if your current policy covers your belongings during a house move – and, if yes, what perils are covered and what the coverage limits are (See also: Does home insurance cover moving?);
- In the event of a DIY-move, it is recommendable to purchase moving truck insurance from your chosen truck rental company to protect yourself from liability and financial loss in case of an accident (Related: Does car insurance cover moving trucks?).
Is moving insurance worth it?
Insurance provides peace of mind – so, considering how stressful the moving process is and how much it would cost you to replace your missing or damaged belongings in case something went wrong during your relocation, moving insurance is usually worth it.
Since released value protection provides only limited coverage, buying additional insurance is crucial when the risk is higher (such as when moving long distance or when moving in the winter) or when the shipment contains valuable or easily damaged items.
So, when asking yourself “Should I get moving insurance?”, you need to consider the specific circumstances in your case, weigh your moving insurance options, and decide what level of protection you want for your items:
- If you’re moving locally or don’t have very valuable belongings, a released value protection policy might be enough;
- If you’re moving across the country, have a lot of expensive items, or just want to be on the safe side, you should consider paying for full value protection or buying insurance from a third party.
Whatever moving insurance option you choose, don’t forget to take pictures of your belongings before the move, so that you have evidence of their condition, should you need to file a claim for damage. Also, be sure to inspect your items upon delivery and, if you find something broken or missing, inform your moving company right away. You have nine months after the delivery date (or the date on which your shipment should have been delivered) to file a moving insurance claim, but the earlier you begin the process, the better!
Must-read: What to do if your movers break something?
