How Much Insurance Should You Buy When Relocating to a New Address?
Depending on what you plan to move, buying extra insurance may make sense.
When many people begin to plan their move they don’t seriously consider getting moving insurance because they assume that they can go without it.
They usually assume that the moving company will cover the costs of anything that is broken, lost or stolen during the move, but that might not be the case.
Many also believe that even if the mover fails to cover for losses, their homeowners or renter’s insurance will pay for their losses.
You might be surprised to know that, although both kinds of insurance can cover part of your losses, you might want to think twice before relying on this kind of coverage to ensure that all of your belongings are totally insured in the event that they are damaged or destroyed.
Check the Details
Although moving companies do offer a certain amount of coverage that is part of the moving service they provide to you, it’s a good idea to look closely at your moving contract and understand completely what the contract covers and what you will have to pay for. You might be surprised to learn that, as part of your contract, movers provide “valuation,” a fixed amount of money that will be paid for insured property in the event of a loss, not insurance.
There are three kinds of valuation protection that movers offer. You’ll want to read through all of them before you make a decision when choosing a mover and deciding whether or not to get extra insurance.
Complete Value Protection
This valuation coverage is one of the better ones offered by moving firms. Just keep in mind that it doesn’t cover everything. Property that is damaged or destroyed, or is lost is transit is covered by this offering. It can pay for replacement or repairs of your property. But be aware that there are usually deductibles and minimum coverage amounts. The name may lead you to believe that you’ll be completely covered, but you may find that you cannot collect as much as you might have thought.
Assessed Value Protection
You may want to opt for this kind of protection if your property doesn’t weigh much and is worth a lot of money. Essentially, you can purchase coverage for a set fee per $1,000 worth of your property’s value. It’s important that the coverage is listed on your bill of laden, or else the mover may not be obliged to cover you.
Declared Value Protection Based on Weight
In the case of this coverage, the mover will multiply the total weight of your property by a fixed amount of money and that will equal the coverage offered to you. If your property weighs 20,000 pounds and the fixed amount per pound is $3, the mover would be liable for $60,000 of your property is lost or destroyed. The depreciated value of your property would determine how much you’d be paid in a settlement.
Damages in Transit
It’s good to be aware that many moving contracts state that the mover is not responsible for damages that occurred during transit. If, for instance, a heavy carton packed with your property tips over and damages another piece of your property, you would not be eligible for reimbursement. That would be the case even if the damage occurred because the boxes were not packed well in the van, or if content settled during transport.
Some moving firm’s contracts also state that the company is not responsible for damages that occur if you packed your property yourself rather than hiring the movers to do it.
If your employer has hired a relocation firm to move your property, there may be no guarantee that your property is protected. It’s important to get your contract number as well as a copy of the contract that your employer signed with the relocation firm. With that information you can find out exactly how much coverage you have when your property is being moved. Based on that information you can decide whether it’s a good idea to purchase some moving insurance.
Snags in the Contract
So, you’ve attained a copy of your moving contract and have pinpointed exactly how much valuation coverage you’ll have in the move. You’ll also be aware of any catches in the coverage that might make it difficult or impossible to collect in the event of an accident.
The next step is to find out about what coverage, if any, you have from your homeowners or renter’s insurance policies. Your best source of information is the insurance agent who handles your homeowners or renter’s policy. You’ll need to ask them if you have any coverage for moving, and if so, how much.
Homeowners and Renter’s Policies
You may find that your homeowners or renter’s policy covers only about 10 percent of the value of your property while it’s being moved. In this case, it may be a good idea to consider purchasing additional moving insurance. This will likely cover your property while it is being moved out of your old house and into the van, while it’s in transport, and while it’s being moved into your new home. Remember, much of the damage that could occur would take place during these critical phases of the operation.
Check with a Professional
There are a variety of different kinds of moving insurance you can buy, but many opt for an additional insurance policy known as “Goods in Transit.” While many moving companies can sell you this kind of insurance, you may want to check with your insurance agent before making any purchases. Your agent can help you figure out whether or not you need additional insurance, and may be able to point out which moving companies offer the best coverage.
Some simple rules of thumb apply when deciding if you need additional insurance, and how much additional insurance you ought to buy.
Basic liability insurance covers somewhere from 30 – 60 cents per pound. If you’re moving pieces of antique furnishings that are worth thousands of dollars, you obviously will need greater coverage that what basic liability insurance provides.
If instead you opt for declared value protection you can set the value of your property. However, if those items are lost, damaged or stolen in transit, you’ll likely need documentation from an outside appraiser or receipts to support your claim for your property’s true value.
Replacement vs. Actual Cash Value
Should you choose replacement value coverage, if your property is lost or destroyed you will receive the cost of replacing the item with a new one. If instead you choose actual cash value insurance, you would be reimbursed for the property’s depreciated value. So, items that are five years old, for instance, will mean that you’ll receive less for those items than if they were brand new.
So, be sure to choose carefully which kinds, if any, extra insurance you’ll need. Be sure to check with your mover to determine how much coverage is included with your move package. Then consult with your insurance professional and determine whether or not the value of your property means that additional coverage is recommended. The decision you make could make a great difference to you in the long run.