Moving Insurance
Our information on moving insurance and mover's valuation is provided to give you some background information you can use to take whatever steps you need to in order to ensure your piece of mind for the protection of your household goods during any move.
A wide range of options for protecting your belongings are available from NJ moving companies, private insurers and your existing Homeowner's or Renter's insurance company. Each offers different levels of protection. You'll want to be informed and make decisions early on so there are no last minute surprises relating to your moving insurance and mover's valuation options.
Basic Terms You Should Know
Perils, Loss and Damage
In an insurance policy, actual cash value coverage means you're covered for what the item could be replaced for minus depreciation - wear and tear due to age or condition. Replacement cost coverage means that the item is insured for the full amount at today's replacement cost without subtracting depreciation.
If you have a large claim and replacement cost coverage, most insurance companies will only pay actual cash value until you actually spend the money to replace your items and you'll then get reimbursed for the difference.
Most major US insurers have replacement programs where they can actually find the replacement item and ship it to you. In that case, you don't have to pay anything and you don't have to wait to get reimbursed.
Most Homeowner's policies provide all-risk coverage for buildings - everything's covered unless it's specifically excluded, like wear and tear, and named peril coverage - only those specific causes of loss that are defined in the policy - like windstorm and hail - on your personal property. Renter's policies may be written on either a named peril or all-risk basis. Read your policy and if you don't understand your coverage discuss your questions with your NJ insurance agent or insurance carrier. You should also check with your insurer for any restrictions or limitations on coverage for your personal items while they're in transit and check your policy deductibles.
Moving Valuation vs. Insurance
Moving companies are NOT insurance companies, but they may have arrangements with third-party insurers that can provide extra protection during your move.
Insurance companies are regulated by the state's insurance department. In order for NJ moving companies to sell insurance, they'd have to be licensed by the state and subject to the insurance department's regulations. Instead, movers provide a type of protection referred to as mover's valuation. Mover's valuation is the predetermined monetary limit of liability that a mover has for your property while it's in the mover's possession. This amount is specified within your moving documents.
For an interstate or long distance move, the Federal Motor Carrier Safety Administration (FMCSA), regulates interstate moves and those international moves that begin or end in the US. They require movers to provide at least two valuation to customers:
- Full Value Protection is an extra-cost option. Many NJ moving companies now offer Full Value Protection unless you want to save money and specifically tell them you don't want it. The minimum amount of valuation for Full Value Protection is regulated by the FMCSA, but movers are allowed to adjust these minimums each year based on changes in the Consumer Price Index. As an example, if you had Full Value Protection at $4 per pound, a 10,000 pound shipment would have a valuation of $40,000. The best part of this option is that the value per pound is not applied to each item, so a 100-pound TV is NOT limited to $400 if the value per pound is four dollars. Instead, it's limited to its replacement cost.Moving companies are allowed to restrict their liability for items that are worth more than $100 per pound unless those items are specifically listed and valued on your moving papers.
- Released Valuation. This type of valuation provides protection at the rate of 60 cents per pound. So, a 5,000 pound shipment would have a total valuation of only $3,000. The standard 60 cents per pound valuation applies to each item in the shipment. So if a 100-pound television were damaged, for example, the moving company's responsibility for the television would not exceed $60. Depreciation applies, but there is no deductible and no added cost to the customer. Standard valuations per pound may differ for local moving. Released valuation provides the least amount of protection available for damage to your possessions.
Moving companies sometimes offer additional valuation options:
- Assessed Value or Lump Sum - This option is based on value and not weight. Basically, you specify the value of the goods you're moving, such as $50,000. The amount you specify becomes the limit the mover can be liable for if your entire shipment was lost or destroyed. See additional limitations below.
- Declared Value - You select a cost per pound, which is then multiplied by the total weight of your goods to arrive at the total valuation for your move. This is like Released Valuation except that you can select higer costs per pound than just 60 cents and the limit is not applied per item. So, if you select $8 per pound and your goods weigh in at 5,000 pounds, your total valuation is $40,000. Each item is subject to depreciation (actual cash value is paid). See additional limitations below.
Mover's Valuation Limitations
Mover's valuation won't pay for certain items or specific types of damage, including:
- Items inside any boxes not packed by your mover, unless the outside of the box or carton is obviously damaged.
- Casualty type losses, including hail, fire, and windstorm. Typically movers have little to no control over these occurrences anyway. This is where your own insurance policy should help you out.
- Damage caused by mold or mildew. Your insurance policy probably won't pay for this either.
- Any loss or damage not resulting from the moving company's negligence or carelessness.
Homeowner's Insurance and Moving
Remember, moving companies are not insurance companies. For casualty type losses you need either a Homeowner's or Renter's Insurance Policy, a rider on your existing insurance policy, or a special moving insurance policy, which may also be referred to as Relocation Insurance.
Homeowner's Insurance Limitations
Most Homeowner's policies provide coverage for your belongings up to your policy limits while they are at your residence. Property that is temporarily off premises is usually limited to 10% of your personal property policy limit - this includes items you've placed in storage. However, if you're moving all of your possessions from one residence to another and your coverage is in effect throughout the duration of your move, you'll probably have coverage up to the policy limits - just confirm that in advance with your insurer. You need to know this information in advance of your move - not after you have damage. Just keep in mind, unless you have an all risk policy where breakage and marring are not excluded (rare), your insurance policy is designed to protect you from casualty types of loss, such as fire, lightning, etc., not damage to your property caused by mishandling your property during a move - that's what the Mover's Valuation is for. Remember too, you insurance policy will have specific internal limits for certain classes of property, like jewelry, guns, and cash.
Renter's Policies and Moving
Renter's policies are similar to Homeowner's policies except that they don't cover your dwelling, just your personal property. Some Renter's policies provide broader coverage on personal effects than Homeowner's policies, but there are a lot of variations offered by insurers, so be sure you know what's in your policy well ahead of your moving date. If you're not happy with the coverage offered by your current insurer, it may pay to shop around for a better policy before the move takes place. Just do so well in advance of your move and be sure to buy an appropriate amount of coverage that reflects the value of your items. A sudden purchase of coverage in an amount far exceeding your prior policy's limits that went into effect two days before your move would be sure to raise some eyebrows.
Moving Insurance Policies
You may also be able to secure private moving insurance, or relocation insurance, although it may not be easy to find. Your mover or, in the case of a company paid relocation your employer may be able to refer you to a private moving insurer. A variety of coverages are available - compare the cost and benefits of available policies carefully. If you're not familiar with the insurer check them out with the insurance department.
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