Moving Insurance: Are Your Valuables Protected?
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This summer, thousands of Americans will make a fresh start in a new home in another city. Although many people try to ensure that their valuables arrive safely, accidents and other incidents may damage possessions during a move. Preparation for a move involves hiring movers to move your items, transferring your home insurance to your new residence, updating your mailing address and more. But what about moving insurance? Is it necessary if you have homeowners or renters insurance? Some carriers will cover you during transit, but it's essential to ask your agent to make sure you have the right insurance policy to protect your belongings. Depending on your home insurer, you may need a separate moving insurance policy, whether you’re moving right down the street or across the country.
What Is Moving Insurance?
Depending on your insurance carrier, your homeowners insurance may help cover your items while in transit if they are lost or destroyed under a covered event. However, every insurer is different and coverage can vary. Homeowners insurance may not always cover you and you may need to buy an endorsement to get coverage or purchase additional moving insurance.
Moving companies offer compensation for any damaged or lost possessions during a move. Generally, this is enough to cover your possessions. However, if you have a lot of irreplaceable and especially valuable possessions, you may want to add additional coverage. Below are the types of insurance you can buy.
Types of Moving Insurance
1. Homeowners or renters insurance
Your homeowners or renters insurance may or may not protect your possessions during a move. If you’re keeping the policy you had at your previous residence, the policy may cover your possessions while they’re in transit. However, you must check with your insurance agent to make sure there are no caveats. For example, your home insurance policy may not cover a possession that was damaged after being moved into your new place if it only covers items while in transit.
2. Full Replacement Value Protection Coverage
The first option offered by movers is Full Value Protection. Your mover is required by law to provide full replacement value protection as default coverage to customers. Full replacement value coverage is the most comprehensive coverage offered by movers and costs about one percent of the worth of your belongings and property. It will pay for any belongings that are lost, destroyed or damaged by movers. For example, if you have household products worth $50,000, you would purchase full value protection $500 in coverage.
3. Waiver of Full (Replacement) Value Protection Coverage
The second option offered by movers is a Waiver of Full (Replacement) Value Protection. The federal government has mandated this protection to protect clients at no extra cost to them. This option doesn't pay market value for your goods. Instead, moving companies assume liability for your furniture, household products and property at 60 cents per pound. Unfortunately, Released Value doesn't provide much coverage to clients. For instance, if your mover damages your 400-pound living room sofa worth $2,000, you may only receive $240 ($0.60 x 400 pounds) in compensation. You should consider this option carefully before signing an agreement. Bear in mind that the minimum coverage amount can vary from state to state. For example, New Jersey just increased its minimum coverage from 60 cents to $1 per pound.
4. Separate Liability Insurance Coverage
Some movers offer separate liability coverage through a third-party insurance company for an additional charge. The professional movers must issue a written record of the purchase. Additionally, the business must give you a copy of the policy (or documentation) once you buy it. If your moving company doesn't comply with this provision, they are liable for any damages or losses due to their negligence.
What Isn’t Covered Under a Moving Insurance Policy?
Depending on your policy, theft from a storage unit or vehicle may be covered by your home insurance policy. If your items are stolen from your moving van, your homeowners insurance commonly will help you replace the stolen items as well. However, if your TV was damaged because it wasn’t packed securely, you will likely not be covered.
Your moving company may have their own moving insurance but coverage may be limited. Some circumstances that may not be covered include:
- Packing hazardous, dangerous or perishable items without your movers being made aware
- Packing your own boxes yourself to save money can make filing a claim difficult if your possessions were damaged by your packing efforts
- An “Act of God” event such as earthquakes or tornados
- Not letting your movers know in writing of any exceptionally valuable possessions before the move
- Not reporting lost or damaged items right after the move. (You have nine months after the move to file a claim but it’s best to start as soon as possible).
Can You Get Insurance if You Move Without Hiring Someone?
If you decide to move yourself, your homeowners or renters insurance might cover your items while in transit in your car or a rental truck. Check with your insurer beforehand because not all insurance companies will cover all your possessions. Here are a few optional insurance coverages you might want to consider:
- Relocation or trip transit insurance: This insurance protects your possessions from covered perils including fire, disappearance or theft (the same perils covered by your homeowners or renters insurance) while in transit or storage.
- Rental truck moving coverage: If you rent a truck, you may already get coverage from the rental company. Some types of coverage found in these policies include cargo protection, damage protection in case of an accident and medical and life insurance for you and your passengers.
How Much Does Moving Insurance Cost?
Homeowners insurance doesn’t always cover your possessions if they’re damaged or broken during a move, unless the damage was caused by a covered event. Some insurers may offer additional moving protection to your homeowners policy that you can purchase. Check with your insurance company to see if they offer extra coverage or special perils. Costs will typically vary depending on the amount of coverage needed, value of your possessions and length of move.
If you are using a moving company, various factors can impact the cost of your moving insurance, such as the type of coverage you select and the value of your possessions. Most movers offer free basic coverage or released value protection. You can also choose full value protection which will payout one percent of the total estimate of the value of your possessions. Third-party insurers may cost between 1% and 5% of your valuation estimate.
Do I Need Moving Insurance?
You might want to seriously consider moving insurance from your moving company or extra coverage through your homeowners insurance if you have many valuable items and plan on moving out of state. For example, if you’re moving from Tennessee to Florida during hurricane season, you may want to consider additional protection in case your items are destroyed. However, if you’re moving a few streets away, you may not need additional coverage beyond what your home insurance or moving company already offer.
Don’t Forget to Update Your Homeowners Insurance
You’ll need homeowners insurance at your new home, and you may be able to save some money by buying a policy that will protect you during your move. SmartFinancial can help you compare your options for free. Just enter your zip code below and answer a few questions to get free home insurance quotes.