Protecting your belongings is important. If you’re planning a move, you’ve probably thought about how you can insure your items. Insurance has always been a complicated subject, and moving insurance is no different.
In this post, we will explain the ins and outs of moving insurance, including the different types offered by moving companies, and when you need to purchase additional insurance.
If you’ve been researching moving insurance, you’ve probably seen something called valuation. First, let’s explain exactly what this is.
What is It?
Because of federal law, moving companies are not legally allowed to sell insurance, so they offer valuation. Valuation works almost exactly like insurance: it determines the worth of your items and ensures compensation if they are lost or damaged. There are two main types of valuation.
Type 1: Released Value Protection
This is the most basic coverage you can have. Almost all moving companies offer this type of protection. You have to ask for it and sign a contract, but it’s entirely free. With released value protection, your belongings are protected at 60 cents per pound.
This means that if you have an expensive mattress that weighs 90 pounds and it gets lost or damaged, you will only receive $54 as compensation. Even if you file a claim, with released value protection you would only get the monetary compensation determined by the pound per item.
Type 2: Full Value Protection
A step up from released value protection, many moving companies also offer full value protection. Usually, you will need to pay a premium for this type of coverage. Depending on the company you use, this plan covers your belongings for up to $4 to $6 per pound with a minimum of 1,000 pounds.
For example, if your movers offer full value protection at $5 per pound and you have 10,000 pounds of household goods to be moved, they are valued at $50,000. This is the maximum amount of compensation you can receive if everything in the moving truck is lost or damaged.
With full value protection, the movers can choose between two options when reimbursing your lost or damaged item. First, they can choose to replace the item with something similar in price, or condition. The other option is that they can choose to pay for repairs to bring the item back to its pre-move state.
One other important thing to keep in mind with full value protection is that movers do not have to cover items valued at more than $100 per pound. For example, if you have a 3lb laptop that costs $1,200, it’s worth more than $100 per pound (worth: $400 per pound) and the moving company would not reimburse you if it were lost or damaged. Because of this, we recommend that if you decide to do full value protection, you personally handle any small items of extraordinary value. Alternatively, you could look for a third-party insurer.
Where You Don’t Have Coverage
Something else you should consider with valuation is what is covered and what is not covered. Moving companies are not required to reimburse you for damaged or lost items in any boxes that they themselves did not pack. They are also not responsible for damages or losses caused by natural disasters.
When Do I Need to Purchase an Additional Insurance?
Like we’ve said before, valuation from your moving company is not the same as insurance. Although it works in a similar way, there are some extra addons that buying moving insurance can give you.
Your homeowners or renters insurance might offer you some sort of protection for your move, but usually they don’t. If they do, it’s not much. Alternatively, your insurance company may offer something called relocation insurance. This tends to be similar to the valuation offered by moving companies. If your moving company does not offer valuation, this is a good option.
Another option is total loss coverage. This will protect you against disasters, like a fire, accident, or robbery. Be aware that this insurance covers you only if 100% of your belongings are lost or damaged. Otherwise, you get nothing.
Contracting a third-party insurance can also be helpful in covering those items that are of extraordinary value that full value protection won’t cover.
Tips for Protecting Your Relocation
The most important thing you can do is take an inventory of everything you are going to be packing. This should hypothetically be done if you’ve followed the right steps for how to pack for a move.
With this list, you can put an estimated value next to each item. This will help you decide what you think the total worth of your items is. It can also help you decide what type of insurance to get and how you will move your items. Use this tool can help you determine how much your stuff is worth.