What is Moving Insurance?
Moving companies are required to carry a few different types of moving insurance, including cargo insurance. Cargo insurance is the coverage that applies to your belongings. Not surprisingly, moving companies don't like to file claims against their policy if damage occurs, however, they still do have the coverage for your items. Instead of utilizing their own policy for damages, they typically offer an option to be compensated for any loss or damage to your goods while in transit. This is not an insurance product regulated by law, rather a coverage for accepting a degree of liability in return for a payment. It is usually referred to as "valuation." This is often confused, and sometimes misrepresented by moving companies as moving insurance. Only insurance companies sell moving insurance.
Much can be done to prevent loss or damage, and the first and foremost important element is your relationship with your moving company. Like all service businesses, the execution and professionalism of a company ranges from excellent to incredibly poor. At worst, a moving company is required to accept only some degree of liability. At best, the company will do everything possible to fully compensate you for any damages and protect their reputation.
The basic, standard protection is 60 cents per pound (per article). For example, if damage or loss occurs to an item weighing 10 pounds, then the carrier's (movers) liability is $ 0.60 X 10 lbs = $ 6.00. This is fine for items that are cheap and heavy, but certainly not acceptable for your amazing high definition flat screen television weighing 20 pounds. This option, referred to as "basic coverage" or "no insurance" shouldn’t cost anything since it’s the bare minimum coverage. Always check with your renters or homeowners policy to see if they cover your relocation.
As with any contract, it is important to read and understand what you’re signing with the moving company. For example, it’s common for the movers to nullify your insurance compensation if you do the packing. It is a fair practice. A mover and its moving insurance company cannot insure contents of boxes that they have never seen. They also don't know if the contents were packed properly. As a result, if you pack it, you take the risk. There are companies who will negotiate on this issue, but the general rule is, if you pack it (or unpack it) you nullify any insurance coverage.
In general, there is only one other kind of coverage that accomplishes what the majority of customers desire, and this is to have your lost or damaged items replaced for what they’re worth. This coverage is replacement value, or full-coverage moving insurance. There may be other kinds offered between basic coverage and the replacement coverage, such as added value, or depreciated value. Typically these policies can be more work than they’re worth, because determining the market or depreciated value can be difficult and often times resemble a negotiation.
Keep in mind there are items not insured, even if you pay for coverage. The most common examples are jewelry, cash, bank notes, etc... It's always a best practice to pack and take these items yourself. Other items not normally insured are coins, stamps, documents, and food. There is no insuring items of sentimental value. The same goes for software data. The loss of data is not covered, so back up your disks before moving! Generally, the interior workings of appliances, televisions, stereos, etc., are not covered by the mover unless the mover does some obvious physical damage to the piece. If the item was handled properly and something does not work after the move, it's your responsibility. Again, contents of boxes are not covered under cargo protection policies unless the mover (or an agent of the mover) has packed and unpacked the cartons. Usually, the mover will cover goods (up to the coverage you selected) for clear mishandling of the carton. If there is obvious damage to the exterior, generally the mover will compensate you. Also, sets of furniture and appliances are not covered. That is, if you have a matching couch, love seat, and chair, and the chair gets ripped, the mover is only liable to repair or replace (up to your coverage selection) the one piece and does not have to cover the matching pieces, even though they may not match after repair, recovering, or replacement of the one piece.
High value items are required to be declared. For example, if the movers are taking your car, they will need a value for the car. You may have a painting or a sculpture worth a fair amount. The idea is, that despite all the cargo coverage there will be a limit on the amount the insurance company will pay out on one given item. If you have any item in your place that exceeds that value, then you must tell the mover. The item(s) of extraordinary value will be noted on the bill of lading and you will be covered.