Everything You Need To Know About Moving Insurance

Everything You Need To Know About Moving Insurance

Tiles spelling out the word "insurance"

If you’ve been thinking about moving and the process of hiring movers, chances are that you’ve come across the term “moving insurance.” What is moving insurance? Also, how much does it cost? Do I need it? These are common questions that movers run into. Fear not! We’ve gathered tons of helpful information about moving insurance to help you on your moving journey.

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What is moving insurance?

Firstly, it’s important to know what exactly moving insurance is. Moving insurance covers the cost of damages, theft, or loss of your items during a move. It helps reimburse movers for items that go missing or are damaged in any way during the moving process. However, it’s important to note that moving companies are actually not certified to sell you insurance. Instead, they often offer a “valuation” of your items, which acts as moving insurance for all intents and purposes. In addition, that means that some moving companies will use “moving insurance” and “valuation” interchangeably. Don’t sweat the lingo though!

How much does moving insurance cost?

The cost of moving insurance actually depends on the type of insurance you choose. The three specific types of moving insurance are covered more in-depth below. Firstly, released-value insurance is usually provided for free by the moving company. Secondly, full-value protection often costs between 1% and 2% of your property’s value. Lastly, third-party insurance costs on average about $1.25 per pound. Valuations, or the cost of moving insurance, are regulated through the U.S. Department of Transportation. Note, prices for moving insurance may vary depending on company and location.

Are there different kinds of moving insurance?

Yes! There are three major types of moving insurance that you need to know about. Also, the different types of insurance vary in cost and coverage. The type of coverage guaranteed may be an important factor when deciding what moving insurance is right for them.

Released-value insurance

This is considered basic moving insurance. Most moving companies offer released-value protection for free. Movers should request coverage from their moving company and sign any paperwork provided to activate it. However, the coverage it offers is not extensive. Often, this type of insurance reimburses customers about 60 cents for each pound of damaged items.

For example, let’s say your new $1,000 sectional sofa weighs about 240 pounds and gets torn during the moving process. This means that you will only be paid about $140 in insurance coverage. This may not be something that movers want to risk, especially if your furniture is brand new and/or expensive.

Full-value insurance

For movers that are looking to upgrade their moving insurance coverage, full-value insurance may be a better option. However, this insurance option is offered by most moving companies but does come at an extra cost. With full-value insurance, movers must calculate the worth of their items. In addition, they must itemize what they want to insure. The moving company will then take the number you come up with, and calculate the valuation’s compensation limit. In other words, movers will have to pay money upfront for the insurance. This cost depends on the price of items they wish to cover. In addition, moving companies will cover costs for damages that are equal to the agreed-upon limit.

Real-world example of how full-value insurance works

For example, let’s say that you are moving $10,000 worth of your belongings. You choose full-value insurance coverage and agree to pay the upfront costs to cover the items. Typically, full-value protection costs 1%-2% of your property’s value. In this specific example, that means that movers will pay somewhere between $100-$200 upfront. However, the moving company will pay movers the full $10,000 appraised for their items if they were became ruined. 

Couple moving a new couch that should be covered by moving insurance

With this type of moving insurance, moving companies will pay to repair the damage that occurs to your items. Also, it will cover the costs of replacing the item with a similar one, or will pay you what it would cost you to purchase a new one. Importantly, it is a good way to cover all of the bases when it comes to getting reimbursed for any damages or losses that may occur to your items. However, it often does not cover antiques or expensive jewelry. Do you have items that are light in weight, but that are highly expensive? For example, a diamond necklace? These items will most likely be excluded from full-value moving insurance.

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Third-party insurance

Released-value protection of often supplemented with third-party moving insurance. It is a form of liability insurance that allows the moving company to make up the difference with the insurer according to the limit on your policy. Essentially, it covers the losses of an individual caused by a third party.

It’s important to note that this type of insurance coverage can be costly. Typically, companies weigh your belongings and then charge about $1.25 per pound. The amount of property you are transporting and how far you are moving are key elements in calculating the cost of third-party moving insurance. In addition, these factors may also help you determine whether third-party insurance is right for you.

Real world example of how third-party insurance works

For example, let’s say that you are moving a dresser, bed frame, mattress, and nightstand. These are furniture items that are common for a bedroom. Together, these items can be about 500 pounds. With third-party insurance, you would multiply 500 pounds by their usual $1.25 per found fee. This would mean that it could cost you about $625 to cover these items through third-party insurance. However, this fee may increase if you are moving a greater distance.

Also, it’s important to note that costs vary between different companies. In addition, there may also be other aspects to your third-party insurance coverage. For example, some companies will only cover boxes of items that have been packed by moving professionals. This means that you may need to pay additional costs to hire professional movers to help pack your items. In this case, you may want to check out our blog on how to help you prep your home for movers.

A moving box that has been professionally packed for third-party moving insurance purposes.

Importantly, it is often recommended that movers opt for third-party insurance if they have irreplaceable or highly-valued items. Often, moving companies will not cover the costs of these high-value items in their policies. However, that doesn’t leave these movers empty-handed. Third-party insurance policies are great ways to ensure that your grandmother’s china and jewelry remain in perfect condition.

Do all moving companies offer moving insurance?

Professional moving companies are required by law to provide some kind of moving insurance. Often, these include released-value and full-value insurance. The most basic moving liability insurance typically offers 60 cents per pound per item for coverages. These coverages are normally provided free of charge. More advanced types of moving insurance, such as full-value protection will often pay movers the predetermined cost of the item. However, this type of moving insurance comes with some upfront costs. Note, third-party coverage is the only form of moving insurance that is actually authorized to sell and provide insurance to customers as we know it.

As previously noted, moving companies themselves are not capable by law to provide “moving insurance”. Instead, they offer valuations. Typically this refers to how much the moving company will reimburse you for damages. Valuation also refers to how much you value your own items. Importantly, moving companies often allow movers to estimate how much their belongings are worth. Valuations can be a great coverage option for people depending on their moving needs.

Do I need moving insurance?

In general, valuations from moving companies and full-value protection are great options for movers. Having moving insurance is the only way to ensure that your items are going to remain safe when they arrive. Or, if they don’t, you will be compensated for damages. Just like in real life, accidents happen in the moving world as well. No one wants to deal with the stress and disappointment of learning that something happened to shift in the moving truck when a ball rolled into the street and the driver hit the breaks. Insurance helps prevent the stress of having to accept and replace items that may have been damaged.

There are many different options available for moving insurance! They vary depending on the type of coverage you are looking for, and how much you are hoping to spend. Finding the right coverage for you is a great way of keeping the future flexible. Overall, it adds less stress to your moving process. There are a lot of coverage options that offer protection from fires, floods, and your couch getting scuffed on the way out the door.

Person signing moving insurance policy papers

At the end of the day, if you value your items and want to make sure that they arrive in the same condition that you enjoyed them last, then moving insurance is a good idea. If you are moving items that are older or of lesser value, then you may not necessarily need moving insurance. For example, if you are planning on keeping your current furniture for just a few more years after your move, then you might not be too disappointed if it chips or scuffs. Ultimately, the choice to get moving insurance depends on whether you want, need, or prefer your items to get to your new home without any damage.

FAQ

How do I appraise the cost of my items?

Firstly, create a list of everything you own that is of value/importance that you would want to protect during the move. This list may include items such as a TV, dining table, couch, etc. Next, assign dollar values to these items and estimate how much they weigh. This may require you to do some research about their current market prices. Then, after you have come up with a dollar amount, check to make sure that the insurance policy you have chosen works well for you. You may need to increase or decrease the amount of coverage for your move.

How long does it take for a moving company to pay for damages?

Typically, moving companies can take up to 120 days after receiving a coverage claim before moving forward. This means that it can take a while for you to be reimbursed. Contacting a representative from the moving company is the best way to stay in touch and up to date about the state of your claim.

Does renter’s/homeowner’s insurance cover my items during a move?

Unfortunately, no. Most renters and homeowners insurance policies do not cover damage to items during moving. This means that just because these items are protected in your home, they may not be protected while in a moving truck.

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