Moving insurance seems like a small detail, but it could potentially save you from big problems
Add moving insurance to the list of things you didn’t know about (like how to hire a moving company) until it was your turn to move. But now that you do, it makes sense to find out exactly what it does and doesn’t do. Moving insurance will add hundreds to your bill—maybe even a few hundred, depending on your specific move details—but can you afford to go without? This information will help you feel better about insuring your household goods.
What Is Moving Insurance?
Moving insurance protects your belongings from loss and damage during the moving process. With a policy, you’ll guarantee some amount of reimbursement headed your way if there’s a problem.
No two moves are the same, and neither are moving insurance policies. They depend on the distance you move and the total value of your goods. Always check with your provider about the cost breakdowns, including the insurance quotes and reimbursement details.
Three Moving Insurance Choices
When you hire a professional company for a move out of state, the company is responsible for transporting your belongings safely under federal law. These companies must follow certain moving rules and regulations that protect you and your haul.
Moving companies take care of this mandate by offering two types of coverage: Full value protection and released value protection. Your reimbursement is directly affected by which coverage you choose.
Know that moving companies cannot legally sell “moving insurance.” Even though most people refer to it as moving insurance when they purchase it, its technical name is “moving coverage.” Only third-party insurance companies (like the national brands you see on TV) can sell moving insurance.
1. Full Value Protection
Just like it sounds, full value protection puts your moving company on the hook for the total replacement cost of your broken or lost items. In the event of lost or damaged items, your mover has three options to fix the problem:
Repair the item
Replace the item
Offer money for the cost of the repair or current replacement value
Full value protection insurance sounds expensive because it is expensive. The costs and the deductibles vary by moving companies, so it's a good idea to comparison shop when interviewing potential moving companies.
Full value protection usually costs 1% of the total estimated value of your household goods. Take a look at this example.
Let’s say the official weight of your haul is 10,000 pounds. The moving company will designate a value per pound, usually $6, meaning the value of your goods would total $60,000. At 1% cost, you’ll pay $600 for Full Value Protection.
2. Released Value Protection
If your moving budget is tight, you might consider released value protection. This type of insurance is free and the moving company’s default coverage if you don’t choose another option.
With released value protection, the company is responsible for no more than $0.60 per pound per item. In other words, if your 50-pound coffee table worth $1,000 is damaged, the mover only has to pay $30 ($0.60 x 50). If you choose released value protection, you have to sign a waiver on your Bill of Lading before moving day starts.
3. Third Party or Separate Liability Coverage
You can also choose a completely separate third-party moving insurance. Call your current home insurance provider if you think you can get better coverage according to the type of moving service. Some companies include separate coverage for moves, while others will add it to your existing policy for a fee. If your current provider doesn't offer moving insurance, many reputable national companies provide third-party coverage.
Most people use third-party insurance as a gap filler. Full value protection from your moving company will cover the majority of your shipment, but some high-value items like your family’s heirloom jewelry will need more protection. Consider third party coverage for situations your full value protection doesn’t cover, like:
Mechanical and electrical accidents
Mold and mildew
Moths and insects
Your costs for third-party insurance usually range from 1% to 5% of the shipment’s total value. For example, an insurance policy for $25,000 worth of goods would cost $1,250 at 5% valuation.
Rental Truck Coverage
Rental truck insurance is affordable (about $20 per day), and the extra coverage insures you against expensive repairs and medical costs you may incur driving a truck that’s larger than usual.
What You’ll Pay For
When you reserve your truck, you’ll have the chance to buy insurance, either piece by piece or in a bundle. Adding liability insurance would be wise, but you probably don't need extra medical coverage if you have health insurance. If the company doesn’t offer you the chance to separate, know that bundled prices cost just a few dollars more and are worth the extra money. Rental truck coverage typically offers:
Collision damage waiver
Supplemental liability insurance
Is Moving Insurance Worth the Cost?
For most people, yes, moving insurance is worth the cost, especially when considering how much it’d cost to replace a truck full of items destroyed in a flood. But, if you're moving locally, just a few miles away, or you don’t have many high-value items, a released value protection policy could suit your needs.
If all goes well with your move, you’ll have paid for peace of mind. However, if you discover missing or broken items, keep all your documentation from your moving company and third-party insurance companies. Contact each to start the claims process.