What are the different types of moving insurance?
There are three main options for movers insurance, but before we explain them it’s important to understand what moving insurance really is. While it’s mostly commonly referred to as “moving insurance,” it’s technically not insurance -- it’s valuation. Moving companies aren’t allowed to sell insurance; however, valuation serves the same purpose for moving. They’re legally required to offer protection that way if anything is lost or damaged during the move, you will be compensated. It’s just important to be aware that if you see the term “valuation” instead of “moving insurance,” you’re still in the right place. The main difference between the two is that valuation is more about the amount of liability moving companies will take for your items.
Released value protection
Under federal law, moving companies are required to provide customers with released value protection. This is the most basic form of coverage on the market, and the amount you are compensated for damaged or lost items is determined by weight. Typically, the moving company accepts liability at a rate of $0.60 per pound of your belongings. In other words, if your precious antique side table only weighs 10 pounds, you’ll be compensated $6. Obviously if you have a lot of expensive belongings, this won’t be a great option. Plus, none of the damaged items will be fixed or replaced, you’ll only receive the money in compensation.
Full value protection
Your second option for moving company insurance is full value protection (FVP) which is exactly as it sounds. With this, your items will get repaired or replaced if damaged or you’ll get cash for the value of your items. Just as you would with renters’ or homeowners’ insurance, you decide what the value of your items are. The only thing to note with this type of insurance is that it may not always cover items of extraordinary value, or items that cost $100 or more per pound. For example, FVP won’t cover a $2,000 jacket or pair of shoes.
Third party protection
Third party moving insurance is an insurance policy from someone other than your moving company. If you’re moving during hurricane season to the southeast, or during winter to states with white Christmases, third party protection is a good idea. This option will cover your items in the event of a natural disaster. It also covers items of extraordinary value making it a great way to supplement a value protection policy if you have a lot of expensive items.
Does my renters’ or homeowners’ insurance cover a move?
It is not common for renters’ or homeowners’ insurance to cover a move. There are clauses in some policies that will, but never assume that it does. Instead, call your insurance company to know exactly what your renters’ or homeowners’ insurance covers during a move. You may realize that your items are only covered when they’re being loaded but not during transit or vice versa.
How much does moving insurance cost?
Moving insurance is a lot like auto insurance when it comes to figuring out the cost. The cost varies by moving company. Usually, companies will charge you a percentage of the value of your items. For example, if you value your items at $35,000, the company could charge you one percent or $350 for coverage. Unfortunately, that price can increase depending on your deductible. Just like auto insurance, the higher your deductible, the lower your cost for insurance. And on top of all of this is the cost of the move itself. Be sure to thoroughly understand your renters’ or homeowners’ insurance coverage and compare multiple moving companies when you prepare to move. You may realize you only need released value protection rather than a FVP.
Which type of moving insurance is best for me?
To truly know which type of moving insurance is best for you, you need to know what your renters’ or homeowners’ insurance covers. This will help you avoid paying for double coverage and ensure you get the proper coverage. If your current policy doesn’t cover moving at all, are you able to pay a deductible if your items are damaged? If you are, a FVP or third party protection policy are good options for you as they require clients to pay a deductible before resolving claims. However, you may want to consider how many items of extraordinary value you have. Only third party protection policies will cover the full cost of those items.
Quick recap: hiring a moving company can be scary but moving insurance can help calm your fears. You can choose from released value protection, full value protection or a third party protection policy. It’s important to understand what your current renters’ or homeowners’ policy covers before purchasing moving insurance. Purchasing moving insurance is a great idea if you’re moving a big household far away.