Moving insurance is one of those things often forgotten. Most people think they can get by without that type of coverage; that the moving company will have everything covered. In fact, many relocation companies do not provide adequate coverage for damage and destruction to people’s belongings.
Even if your client opts to go with the most reputable movers in town, accidents happen and things can get damaged. If that happens and they turn to the relocation company to be compensated, your client might find little support. Other insurance policies like their current homeowners' insurance might not be of much help either. All of which means an unhappy and frustrated client.
So, the moving company cannot always be relied upon in the event of damaged property and neither can most standard homeowner's insurance policies. And that is why people need to consider additional insurance options. It can provide much-needed peace of mind; assuring the client that even if something does get damaged during transit, the excitement of moving will not dissipate - or at least, it doesn’t have to.
What the Moving Companies Cover
Moving companies do provide some level of coverage. All moving companies, in fact, are liable for the value of the goods they transport, according to the U.S. Department of Transportation Federal Motor Carrier Safety Administration. But things are a little more complicated than that.
While the law does mean that relocation companies can’t shun responsibility for damaged goods, there is no guarantee of safety or even adequate compensation. People have the option of two levels of basic liability: “released value” and “full value.” These are often referred to as “valuation” coverage, which leads some people to mistakenly view them as insurance - they’re not.
Full value coverage provides the most peace of mind. With this option, the relocation company is responsible for the entire value of the possessions they carry. The client will, however, have to pay extra for the move. But it means the moving company, at their discretion, will have to repair, replace, or settle in cash for any item damaged during transit.
The second option, released value, does not increase the cost of the move, but it provides a lot less reassurance. According to AngiesList, the company “is responsible for no more than 60 cents per pound per item.” For a piece of furniture weighing 50-pounds and costing $1,000, that means the moving company would only have to pay $30 for damages.
Clients should be encouraged to read all documents carefully before signing to ensure they understand what is covered by the moving company.
Will the Homeowners or Renters Insurance Help?
Chances are, the coverage that the moving company provides will not be adequate. Or, it is likely that your client would prefer to avoid the other moving charges for the top level valuation coverage. In that case, they may turn to their current homeowners or renters insurance policy.
Some policies extend to property in transit. The coverage, however, is not usually comprehensive here with only about 10% of coverage typically provided. For the average mover, that, again, will not be sufficient. It is another reason why you need to encourage your client to purchase additional "mover's" insurance.
Homeowners' insurance is generally designed to cover items while they are stationary in your client’s former home. Coverage resumes once the items have been relocated to the new home (provided the necessary arrangements have been made to transfer the policy to the new address). But while in transit, those vulnerable possessions could potentially be without enough insurance coverage.
You can help your clients decide if they need movers insurance by spelling out to them what is and, more importantly, isn’t covered by their home insurance policy.
A Look at Moving Insurance Options
There are many options for moving insurance. Your clients will decide based on the types of goods they plan to have transported, their current range of insurance coverage, and their risk tolerance level.
The moving companies can, and usually will, try to sell additional insurance to the people they are moving. The most common type sold is called “Goods in Transit” insurance. But, the moving company might not have your client's best interest at heart. No doubt the client would prefer to talk over the options with you, their trusted agent.
Third-party moving insurance options could start with a call to the customer's current home insurance provider. It is likely that the provider will be willing to add extra coverage for the move to the existing policy, for a small fee. If that is not an option, you can recommend reputable national companies that specialize in providing third-party insurance coverage.
Steps to Address with Your Client
With so many things to take care of, planning ahead is essential for a successful move. Your client will no doubt be preoccupied with a dozen different things at once. A helping hand from their friendly local insurance agent will be much appreciated. One way you can do that is to clarify the steps they need to take to ensure they have sufficient insurance coverage for the move.
You should help make sure they have the following:
- Goods evaluation - Every item the client intends to move should be valued and listed. In addition to being a requirement for the moving company, that will help in the decision of which insurance option to buy.
- Reputable insurance companies - You might have one provider or a whole list to recommend. Whatever the case, you should give your clients something to compare against the offer from the moving company.
- What to do in the event of a claim - If something is damaged during the move, no doubt it will be discovered during a time of much disruption in your client's life. They will not want to have to sift through boxes trying to find the insurance paperwork and figure out how to make a claim. You'll be there hero should damage occur to their belongings, while in transit, and they simply have to just put in a call to you. Your office then handles everything from that point. They simply need to approve the reimbursement amount.