Household moving companies offer a few insurance options to consumers. Two are required by federal law, and the others are extra policies that moving services offer. It’s important to understand your options before selecting which to buy.
Full Replacement Value
This is the most comprehensive insurance option that federal law requires household moving companies to offer. If your items get lost or damaged, you’ll get the replacement value based on what you declared up front. You can list your things individually, or in groups, such as “dishes.” The replacement value may not equal what you originally paid, but it’s worth getting at least some of your money back. If you do buy full replacement value coverage, it may not be in your best interest to carry other insurance on those items, because you may get penalized for having co-insurance on the same items.
Full Replacement Lump Sum
Another option is to buy insurance that will pay you a lump sum for items in your shipment that are worth less than $500. You have to list the declared value (if you know it) or you will be paid up to $500 for each. You can’t just pick a random coverage amount. It has to be at least $6.00 times the total weight of your shipment.
Released Value Protection
You don’t need to pay anything for released value protection. Household movers are required to offer this insurance at no extra charge and it may be the only option you have if you’re low on funds due to the move. This policy only pays you back based on how much the item weighs: $0.60 per pound. For example, if the movers damaged an item that weighs 5 pounds and has a replacement value of $850, you would only get $3 back under a released value protection. This insurance may not be the best option if you’re moving items with a high replacement value.
You may prefer buying separate insurance all together. Your moving company will offer to sell you third party liability insurance, or you could shop around to find your own. The moving company still has to provide released value protection. Keep this in mind so that you don’t over insure your items. You may already be covered if you have homeowners insurance. Check your policy or call your agent to double check.
Truck Rental Insurance
Household moving companies may offer customers the option of renting a truck and moving themselves. If you’re moving yourself, you can buy insurance to cover your items during transit. The name is misleading because it doesn’t cover the truck itself, or drivers and passengers. It also doesn’t cover damages that occur when loading and unloading your items.
Which insurance you choose depends on your current insurance coverage and the replacement value of your items. Household moving companies make more money on a move by selling insurance. Protect yourself during a move, but don’t feel like you have to buy all of the insurance you’re offered.