Moving Insurance 101: What Is It and Do You Need It?
Your stuff is important. But is moving insurance worth the cost?
Also known as evaluation or coverage, moving insurance can protect your belongings in case they're lost or damaged.
If you opt to use a moving company to bring your stuff to your new address, it takes a lot of stress out of the process. Sure, you still need to pack everything up, which is a task of its own, but you won't be responsible for physically bringing everything to your new location. That said, using a moving company can bring forth a new point of stress if anything happens to your stuff in transit.
Whatever happens from the time your stuff is packed into the moving vehicle to the time it arrives at your new dwelling is largely not up to you. Things can happen, like toppled or missing boxes that contain valuable or fragile items. And while moving companies usually provide some sort of reimbursement for lost or damaged items, it (probably) might not cover the total cost of the loss or all of your items. This is where moving insurance comes in.
As you might guess, moving insurance requires you to take an inventory of your items and to assess their value. Once you have your number, you'll then be able to shop your insurance options. If you already have renter's or homeowner's insurance, you may already have some coverage for moving, so it's best to start there versus looking into a brand new plan.
Need more tips for your move? Check out the best moving companies of 2024 and how to change your address on your phone after you move.
What is moving insurance?
When thinking about moving insurance, there are two things to consider -- the valuation that moving companies provide for damages and third-party moving insurance for additional coverage. Moving companies themselves are not technically allowed to sell actual insurance policies.
Interstate moving companies are required by federal law to provide both "released value protection" at no cost and "full value protection," usually for an additional fee. These are two methods for reimbursing customers for items damaged or lost.
Additional, third-party moving insurance can protect your belongings in case they are lost, damaged, stolen or destroyed by fire or other disasters. The compensation you receive for losses will depend on the type of moving insurance you choose -- you could get very little in the case of damages or have everything fully replaced and repaired.
Some moving companies work with insurance providers to offer policies, while others will require you to find insurance on your own.
What is the difference between released value coverage and full value coverage?
Most moving companies provide released value coverage at no additional cost. The Department of Transportation requires all movers to provide it and many states mandate it as well.
Released value coverage: With this type of coverage, movers will evaluate the value of your belongings' weight on a per item basis, offering $0.60 per pound. So you know that LG C3 OLED you paid over $1,000 for? If it breaks in transit, you'll receive a total of $21.30 for the 55-inch version since it weighs a little over 35 pounds. With that type of math, it's hard to even call this coverage.
Full value coverage: Considering how little you'd be reimbursed for your items with the released value coverage option, you'll want to consider full value protection. While it's not free (and may not be cheap), it's better than nothing. Full value protection requires the moving company to either replace, repair or offer a cash settlement for the lost or damaged item. "Under this option, movers are allowed to limit their legal responsibility to loss or damage to items of 'extraordinary value,' meaning items that are valued more than $100 per pound (such as jewelry, china, or furs)," per the Federal Motor Carrier Safety Administration.
While this protection doesn't cover any item that would be valued at over $100 per pound, the movers will still be responsible for transporting said items safely. These high-value items will need to be disclosed to the movers, regardless of their disqualification of coverage.
Remember that two types of coverages are required to be offered by moving companies for interstate moves only. If you're moving within your state, there may be specific regulations in place. The FMCSA suggests that you should, "Check with your state, county or local consumer affairs agency or state moving association if you're moving to a new location within the same state.
How is moving valuation coverage different from moving insurance?
Remember that moving companies' valuation coverage isn't insurance. It's a system for reimbursing you for lost or damaged items.
A moving insurance policy requires you to sign a contract in which you pay an agreed upon premium for a specific amount of financial coverage. Whereas valuation coverage only deals with damage caused by movers, moving insurance is generally broader and covers events like fire, theft and other losses.
Should I buy moving insurance?
If peace of mind means anything to you, then yes, it's probably worth paying extra for moving insurance. That doesn't mean it may make less sense for some people to go for it, though. If you don't have a lot of stuff or aren't moving very far, then it may be wise to get a quote from a company and see if it makes sense for you.
Most movers are required to provide valuation coverage for handling your belongings, but which type you choose (released value coverage or full value protection) dictates how much you're reimbursed in the event of damage or loss. If you're only accepting released value coverage, you may want to supplement with a separate insurance policy that protects all of your possessions from a wider range of calamities.
What else should I know before buying moving insurance or coverage?
Moving companies don't cover damages inside boxes you packed, unless the boxes are obviously damaged on the outside. "You may consider packing your own household goods articles to reduce your costs, but if the articles you pack are damaged, it may be more difficult to establish your claim against the mover for the boxes you pack," the Department of Transportation writes.
Packing perishable, dangerous or hazardous materials in your household goods without your mover's knowledge may limit your mover's liability. So will choosing released value coverage when your belongings are worth more than the standard 60 cents per pound evaluation.
What happens if my belongings get damaged during the move?
This is where an extensive inventory of your possessions will come in handy. While this may be something required for you to create for insurance policies, it's also important for you to have if one or more of your items are damaged during the move.
The simplest way to do this is to list all of your belongings along with their values and current conditions before they leave with the movers. If you have the time and are willing to put forth the effort, you can also take photos of your items. The idea is to be able to prove that your items were damaged by the movers and not prior.
If your belongings do get damaged or lost during a move, you'll need to report those lost or damaged articles by filing a claim with your mover within nine months of the delivery date.
For more moving tips, check out 7 must-have moving apps and tips for first-time movers.