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Understanding Moving Insurance: It’s More Than You Think

— September 24, 2020

When you want total protection of your items, you may need to purchase a third-party policy from the insurance company itself.

A lot of people do not consider moving insurance important due to the simple assumption that moving companies automatically provide some form of coverage for items damaged or lost during transit.

You probably don’t deem it an essential, either.

Normally, when the mover sends you their contractual document, they’ll probably bring to your attention that their service comes with insurance that covers your stuff against damage when the items are in the mover’s hands.

If you care to dig into the finer details of the contract, you will also probably notice that the coverage promised does not protect all your possessions and another form of insurance may be needed to properly safeguard your items.

Regardless, the fact of the matter is that movers do not really provide mover’s insurance. What they are rather providing is valuation coverage – which is not the same thing as moving insurance.

Understanding Moving Insurance

Valuation refers to a limit of liability that is determined beforehand in the event of damage or destruction of goods.

What may be lost on many people (and probably the reason most do not give mover’s insurance a second thought) is that the moving contract offers some form of “insurance” that requires the mover to pay some compensation without you (the customer) needing to incur an extra charge.

Truth is, though, this does not reflect the actual value of your goods and is often some negligible amount.

Beyond this, you will need to purchase additional valuation coverage if you really want proper protection of your belongings.

Which takes us to the next point…

Black and brown Dachshund standing in box; image by Erda Estremera, via
Black and brown Dachshund standing in box; image by Erda Estremera, via

Types of Moving Insurance

As a customer, there are three moving insurance options available to you:

Basic coverage – As the name suggests, this is the most fundamental form of coverage. Also known as released value protection, this is the type of coverage moving companies offer you free of charge.

However, and key to this whole article, is that should your items get damaged or lost, don’t expect any meaningful compensation. It tallies to about 60 cents per pound for each item. It never takes the actual value of your prized possessions into account.

Full coverage – Also known as full value protection or expanded valuation, this form of coverage is an improvement over the basic one. In case of loss or damage of items, it provides coverage for the “replacement value” of that item.

For instance, if your five-year-old home theater gets smashed in transit, what the mover will do is either try to repair it to its original condition or give you the fair market value of the five-year-old system (as opposed to a new one).

Third-party insurance – As you can see, even full coverage sometimes is not enough. When you want total protection of your items, you may need to purchase a third-party policy from the insurance company itself. In reality, this is the actual moving insurance.

So, Do you need to Insure your Items During a Move?

Given the high cost of moving, many people opt against purchasing valuation coverage beyond the basic policy.

As with all types of insurance, it is up to you to decide whether or not to purchase valuation coverage. There are chances your items might arrive at the destination in one piece. But there are also chances that something unfortunate might happen. Often it does. When? You really can’t tell.

The law doesn’t obligate you to purchase mover’s insurance. However, if you want the peace of mind that comes with knowing your items are covered in the event of loss or damage, it makes sense to pay a small fraction of your property’s total value to safeguard yourself in a worst-case scenario.

But know what you’re getting, as even full coverage doesn’t safeguard precious items like jewelry.

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