Moving Companies: Liability and Insurance Explained

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Moving companies are required by federal and state law to offer insurance to their customers. However, the amount and type of insurance changes depending on what you as the customer purchase. Below is an explanation of the typical types of insurance offered by moving companies.

The Federal Motor Carrier Safety Administration

Interstate moving companies are governed by the Federal Motor Carrier Safety Administration (FMCSA), a division of the Federal Department of Transportation. In addition to other regulations, the FMCSA requires companies that move goods across state lines to offer insurance and notify customers of the available insurance types prior to asking a customer to sign any agreement. While local moving companies are technically exempt from the rules of the FMCSA, such a company may still be subject to state agency guidelines.

Declared Value Insurance

The first type of insurance coverage typically offered by a company is called “declared value.” In type of insurance calculates the value of your belongings by multiplying the weight of your shipment by a specific amount per pound. This coverage is offered at no cost to the customer, and is the default coverage provided if the customer does not purchase more thorough coverage.

With declared value coverage, the amount you receive should the company damage your goods is their calculated value. For example, if the specific amount is $1.00 per pound and your household weighs at 10,000 pounds, the most that the moving company is liable for is $10,000.00. This insurance essentially depreciates the value of your goods.

Assessed Value Insurance

The second type of insurance typically offered is “assessed value,” which is based on the cost of the item. This type of insurance is also referred to as “lump sum value.” This is a good idea for a smaller move consisting of higher value goods because it is based on cost rather than weight. These higher-value goods, however, must be identified as such on the company’s bill of lading for your move.

With this type of insurance, should the identified goods be damaged, you will receive their value. Keep in mind, though, that the company must be notified of and agree to this value prior to their moving the item.

Full Value Protection

The third type of insurance typically offered is “full value protection.” This coverage will pay for the replacement or repair of damaged items, but typically requires the customer to pay a deductible prior to receiving a payment from the company. The higher the deductible to be paid by the customer, the cheaper the company will charge for this type of insurance. Keep in mind, though, that not having to pay a deductible will may be the cheapest option should you have delicate or high value items you do not anticipate making it through your move unscathed.

The type of valuation offered by the company and that you purchase affects the amount you can recover if your goods are damaged or destroyed. Before signing a contract to hire a specific company, inquire into the different types of insurance offered and make the best decision to protect both yourself and your belongings.

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