Moving Insurance: Do I Need It?

As you plan your move, you’ll be faced with a barrage of decisions, such as when to move and what to take and leave. Then, you’ll have to research the best moving companies and their services. When it’s time to decide whether to purchase moving insurance, you may experience decision fatigue and a bit of skepticism.

Moving insurance can protect your items while they’re in transit and reimburse you if your movers lose or break anything. But do the potential benefits justify the added cost, or is your money better spent elsewhere? Read on to learn about the types of moving insurance and decide whether coverage is worth it for your move.

 

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What Is Moving Insurance?

Moving insurance is a policy that covers your personal belongings during a move. You can file a claim with your insurance company if a covered item is lost, stolen, damaged, or destroyed during the moving process. Depending on the situation, the insurer will do one of the following:

• Pay to repair the item
• Pay to replace the item
• Provide a cash settlement

The amount you receive depends on the type of insurance you have, the terms of your policy, and the item’s value. Not all policies will cover the full replacement cost of your belongings.

Keep in mind that moving companies can’t legally sell insurance. They do, however, offer contents coverage plans as required by law. These aren’t technically insurance plans, but they cover your items up to a certain amount and cost a percentage of the total value of your belongings. Some companies, such as International Van Lines, offer third-party moving insurance when you book a move. However, you can also shop around and purchase a policy directly from an insurance provider.

 

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Do I Need Moving Insurance?

If you want to ensure that your belongings are fully covered, you will need to purchase moving insurance. The same applies if you rent a moving truck, portable moving container, or other equipment. Without moving insurance, you will be responsible for any damage to the rented equipment or your own belongings.

When you hire a moving company registered with the U.S. Department of Transportation (USDOT) to complete your interstate move, you will receive a small amount of complimentary coverage, known as released-value protection. Unfortunately, this policy will not cover the full replacement cost of your belongings.

Interstate movers also offer a second, more robust option known as full-value protection. This policy provides significantly more coverage but will not fully cover your most valuable belongings. For comprehensive protection, you will need to purchase third-party moving insurance.

Keep in mind that basic and full-value protection plans only apply if movers pack your items for you.

 

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Types of Moving Insurance

Whether you hire a full-service mover or rent equipment from a company such as PODS or U-Haul, you will have multiple insurance options.

Full-Value and Released-Value Protection

The Federal Motor Carrier Safety Administration (FMCSA) requires moving companies to offer two types of moving coverage, also known as valuation coverage, for interstate moves. Remember that while this is considered coverage, it isn’t technically insurance.

• Released-value protection: Released-value protection covers no more than 60 cents per pound per item. By law, this coverage must be included in every interstate move. It comes at no additional cost but provides minimal protection. Nearly everything you own will exceed the maximum amount offered by released-value protection.
• Full-value protection: Full-value protection covers the full replacement value of your belongings. However, companies may differ in how they calculate that value. Federal regulations specify a minimum value of $6 per pound multiplied by the weight of your shipment. You may also secure higher coverage by declaring the value of your items.

Full-value protection is the default coverage. Unless you proactively waive this coverage, the movers will factor the price into your total. Because opting out leaves you subject to the less favorable terms of released-value protection, you must sign a statement acknowledging your decision. Your bill of lading should note which type of moving coverage you chose.

Before making a decision, consider the value of your belongings. A Macbook Air weighs less than 3 pounds, as does a bottle of expensive wine. Released-value protection would reimburse you less than $2 for either. With full-value protection, the mover will repair the item, replace it with a similar item, or provide a cash settlement to cover the cost of repair or replacement.

Keep in mind that full-value protection does have one major limitation. Under federal law, movers may limit their coverage for items of extraordinary value (items worth more than $100 per pound). They are still responsible for the safe delivery of these items, though. You can ask your mover for a detailed, written explanation of this limitation.

Rental Truck or Container Coverage

The federal regulations governing full-service moving companies do not apply to companies that rent trucks, trailers, and portable storage containers. However, most companies still offer some form of coverage. These policies typically fall into one of two categories:

• Equipment damage waiver: You are liable for any damage to rental equipment while it is in your possession. To protect yourself, you can purchase a damage waiver that covers accidental damage, theft, and vandalism. This coverage is available for moving trucks, trailers, portable storage containers, and other moving equipment.
• Cargo or contents coverage: This policy protects your belongings during transit. Before purchasing this coverage, read the contract carefully to understand exactly what is covered. Most policies cover natural disasters and accidents but exclude damage caused during loading and unloading.

Truck rental companies offer additional coverages to protect the driver and passengers. This includes personal accident insurance, also known as medical/life protection, and roadside assistance.

Third-Party Moving Insurance

Finally, you can purchase third-party moving insurance through the moving company or an insurance provider. These policies are more comprehensive than the coverage provided by moving companies.

Third-party moving insurance may be referred to as any of the following:

• Separate liability coverage
• Supplemental liability coverage
• Trip transit insurance
• Relocation insurance

The best long-distance movers and truck rental companies offer third-party insurance to supplement their other policies. You will still get released-value protection if you purchase third-party insurance through a moving company. That means the mover will pay up to 60 cents per pound per item, and the third-party insurer will cover the rest up to your policy limits.

The supplemental liability insurance offered by rental truck companies can provide up to $1,000,000 of coverage. It typically covers both property damage and personal injury.

If your moving company does not offer third-party insurance, you can purchase a policy directly from an insurance provider. You may also find that your homeowners insurance policy provides limited coverage for personal belongings during a move.

 

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Moving Insurance Coverage

Coverage and exclusions will vary depending on the policy, provider, and coverage you choose. Since the most common type of moving protection is the valuation coverage provided by interstate movers, we will focus on those policies below.

What’s Covered

Released-value protection covers no more than 60 cents per pound per item. Full-value protection, meanwhile, covers at least $6 per pound per item. Your coverage could be significantly higher, though—especially if you declare the value of your items rather than relying on a basic formula.

Valuation policies generally cover the following:

• Belongings damaged during the loading or unloading process
• Damaged belongings that were packed or unpacked by the movers
• Belongings that are lost, stolen, damaged, or destroyed during transit
• Damage that occurs during any other service the mover provides

Remember, valuation coverage serves as liability insurance for the movers. As a result, it only covers damage and loss that occurs due to events within the mover’s control. Third-party moving insurance offers not only higher coverage limits but also broader coverage.

What’s Not Covered

Valuation policies generally do not cover the following:

• The full value of items worth more than $100 per pound
• Items packed by the homeowner rather than the mover
• Claims filed outside a certain window of time
• Hazardous materials or perishable items, especially if undisclosed
• Natural disasters and other events outside the mover’s control
• Damages that occur during storage at a third-party site

Most of these exclusions will not apply if you purchase third-party moving insurance. However, you should read the terms of any policy carefully to determine what it does and does not cover.

 

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How Much Does Moving Insurance Cost?

Released-value protection is the only type of moving insurance that does not cost extra. The cost of any other coverage will vary depending on the type of policy, the value of your belongings, and the deductible.

The cost of full-value protection and third-party insurance is based on the estimated value of your items. In general, you can expect these types of coverage to cost 1% to 5% of the value of your belongings. You will have more control over the cost if the company offers multiple deductible options. For instance, JK Moving Services offers four deductible options, priced as follows:

• $0 deductible: $1.05 per $100 of value
• $100 deductible: $0.90 per $100 of value
• $250 deductible: $0.70 per $100 of value
• $500 deductible: $0.50 per $100 of value

PODS and 1-800-PACK-RAT list monthly rates for their contents protection plans. Prices range from $34.95 per month for $5,000 of coverage to $469.95 per month for $300,000 of coverage. Similarly, truck rental companies often charge a daily rate for damage waivers. Cargo protection and supplemental liability insurance rates vary depending on the amount of coverage you select.

 

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Our Recommendation

It is possible to complete a move without any harm befalling your belongings. However, the moving process is riddled with risks, from inclement weather to careless movers. Even if everything goes perfectly, moving insurance provides peace of mind, giving you one less thing to worry about. In other, more likely scenarios, it offers financial protection by covering the cost to repair or replace lost, stolen, or damaged belongings.

Full-value protection will cover the full value of your belongings or at least $6 per pound and costs between 1% and 5% of the value of your shipment. However, this only applies if movers pack your items. For maximum protection, we recommend investing in third-party moving insurance through your moving company or a trusted provider. This type of policy is ideal if your move includes high-value items, such as jewelry, antiques, and fine art since full-value coverage excludes items worth more than $100 per pound.

 

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