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If you are planning a move, one of the most important things to do is ensure that all your belongings are safely made to your new home. Or at least, if they end up damaged, you can afford to replace them. And for this, you need insurance. However, insurance can often be confusing, so we’ve prepared a guide to help you! Here’s a thorough explanation of what you need to know about moving insurance.
Do you actually need insurance?
The first thing we need to consider when talking about moving insurance is whether you need it in the first place. This basically comes down to a couple of things, including, of course, how you are planning to move.
First, let it be said that you probably don’t want to bother with moving insurance if you are going to move on your own. Not only will it be a lot more complicated to set everything up, but the fact that you are moving on your own also allows you to take better care of your things. Besides, suppose you are worried about trying to save money due to the effects of inflation in addition to the expenses of purchasing a home. In that case, you probably don’t want to set aside additional funds for something you most likely won’t need.
On the other hand, if you are moving with the help of a moving company, things become a bit more complicated. Not only is moving insurance much more accessible with their help, but if you are not really sure about the quality of their services, it’s always best to insist on moving insurance. Of course, insurance is sort of unnecessary if you have prior experience with the company and know you can trust them.
The types of moving insurance available
The next thing you need to know about moving insurance is which type is the best fit for you. Thankfully, whether you are looking for a relatively ‘cheap’ alternative or are just looking to protect a few specific belongings, there are decent choices to pick from.
Released value protection
Released value protection is the most basic type of moving insurance you can have. It is also something that’s provided by practically every moving company. If the moving company does not have released value protection on offer, then you can be sure that they are only semi-legal at best.
The released value protection has one significant advantage and one major disadvantage. Namely, it is completely free, and the moving company reimburses you if they damage your items. This makes it an ideal choice for those looking into how to afford mortgage payments while also getting some protection for their items. The disadvantage, however, is that you can’t expect much of a payout if something happens. The reimbursement is minimal, and you can’t replace everything.
However, note that this is not something every moving company provides to you by default. Some moving companies admittedly do, but in some cases, you need to explicitly ask for this insurance if you want it to come into effect.
Full value protection
The next most ‘common’ moving insurance you can get is full value protection. This also happens to be something that a moving company typically offers to its customers. And, as the experts associated with the mover’s database bestmovers.nyc like to note, if you have any precious items, you want to get this insurance. No matter how professional a moving company is, things sometimes happen outside its control. And having a backup solution for replacing lost items is always a good thing.
The insurance itself is the complete opposite of released value protection. First, you will be expected to pay a premium for this service when signing the contract. Second, if the worst does come to pass and your items get damaged, you can rest easy knowing that the moving company will have to reimburse you the full amount or replace the damaged items themselves.
However, like with released value protection, you will not have this insurance bundled with your moving costs. If you want more protection for your items, you must take the initiative and ask for it.
Liability coverage falls under insurance types you need from a third-party provider. In other words, you would not be able to get it from your movers directly. You need to approach an actual insurance company instead.
Getting liability coverage is an excellent idea for one simple reason. It stacks on top of the released value protection insurance you might get from your mover. It only has one flaw: the payout you can get goes only up to the policy limits. They are set when taking out the insurance in the first place. This makes it a little cheaper than full-value protection. It also means that if you have a precious item, you won’t be able to make up for its loss through this insurance.
Even though moving companies don’t offer this type of insurance, it is not uncommon for a moving company to introduce you to a third party they work closely with who offers it. You can accept for the sake of convenience or try to find a more reliable and cost-effective insurance provider elsewhere.
Special perils contents coverage
We just mentioned the risks of moving with high-value items. Because of the hard limits, most types of insurance have, relying on them to replace these values is not possible. This is where special perils contents coverage comes in.
This insurance covers specific items and can quickly help you compensate for your loss. Do you have a high-value musical instrument, such as a piano, that cannot be moved easily? Well, that’s when you’d opt for this insurance and rest easy in knowing it has you covered. However, remember that this insurance does not cover ‘breakables.’ In other words, no matter how high-value your item is, you will be rejected if you are trying to insure a vase or a set of glasses or something similar that breaks easily. This is because most insurance companies ultimately offer their services, hoping that nothing will happen to your items and that they will get paid. As such, high-value and high-risk things are too much of a potential loss to provide insurance.
Trip transit insurance
Every type of insurance we’ve discussed already applies to your items from the beginning to the end of the move. In other words, whether they get broken when they are being loaded onto the truck, in transit, or when they are being set down in your home, they will be covered by the insurance policy.
This naturally means you are also paying a little extra for the added security. However, this might not suit your needs perfectly if you are trying to save money. Since the risks to your items when they’re being loaded and unloaded are relatively manageable. So, realistically speaking, it is better to purchase insurance for just the transit portion of the move. And that is what trip transit insurance allows you to do. It covers replacing your items should anything happen to them during the ride. And it does so at a smaller price than the equivalent moving insurance, which applies to the whole process.
Floater insurance is similar to specific perils contents coverage in that it applies to specific items. However, floater insurance is both unique and exciting because it has two wildly different applications.
The first use of floater insurance is to secure the replacement funds for items at high risk during a move and yet don’t have much value. In these scenarios, it is treated almost like blanket insurance and applies to a broader range of your belongings. Things such as cups, glass tables, vases, picture frames, etc., would all fall under this type of floater insurance.
The other use of floater insurance is to protect yourself from losing precious yet fragile items. Remember how specific perils contents coverage providers would typically refuse to insure high-value items if they are considered high risk during a move? Well, that’s when you’d look for insurance providers who offer floater insurance. Whether it’s art, expensive jewelry, or whatever else valuable you might own, floater insurance is the perfect solution.
The typical cost of moving insurance
The cost of moving insurance falls into three different ‘brackets.’
First, we have the federally mandated released value protection. Whose cost, even though you often have to explicitly ask for it, is included in your move’s price.
Second, we have full-value protection and individual insurance schemes. They handle a smaller number of not-too-precious items, and the typical cost is one percent of the items’ value.
Finally, we have the third bracket of cost. And here, the charge is anywhere from one to five percent of the items’ value. This last ‘bracket’ covers most individual item insurances. And, while it may seem like five percent of an item’s value is not much, you have to remember this is the type of insurance that is used to cover the most valuable things you own. If you are trying to manage your finances well, you’ll be unable to shrug off this expense.
Items not typically covered
Another thing you should definitely know about moving insurance is when it won’t apply. There are typically five cases in which your items would not be considered under the protection of moving insurance:
- When you’ve packed the items yourself.
- If you have undisclosed high-value items among your belongings
- When you delay reporting the damage past a specified date
- If you have packed dangerous items or chemicals among your belongings without informing your movers
- When the damage happened because of a natural disaster
Specific insurance may cover some of these points anyway. Such as floater, special perils, and transit insurance covering damage to items you packed yourself or if the damage is caused by a disaster. However, every insurance waives its responsibility for one or more of these scenarios. So, always make sure to thoroughly inform yourself on the subject of exceptions.
The best approach to taking out an insurance
Whatever you do, do not try to mix and match insurance. Of course, combining different insurance schemes with released value protection is an exception, but only because it is totally free. The reason why you shouldn’t do this is that you can easily end up overspending. Spending too much money on insurance eventually becomes counterproductive since it is sometimes cheaper to just replace a few minor damaged items yourself.
The inherent flaws of insurance
As you may have been able to tell, the thing about moving insurance is that it’s an awkward tug-of-war between insurance providers and the users of their insurance. We have already blatantly stated that insurance providers are looking to turn a profit from you. As such, you can’t really ever expect to get ‘the best value’ for your insurance. Sometimes, the fact that the insurance provider can ‘either’ replace an item or reimburse you its value results in you getting a subpar replacement. Or, the insurance company can try to deny your claim and cite that the items were damaged before the move. And ask for proof that they weren’t. Proof you might not be able to provide. While such cases are admittedly rare, they are still things that happen. As such, it’s better to do your best to protect your belongings than bet solely on your insurance.
With our guide on what you need to know about moving insurance, you will be able to protect your interests. Just remember to read the terms of your insurance thoroughly, and your move will go by just fine! There’s no need to worry about it too much if you do this.
Check out our guide on what you need to know about moving insurance so you can properly plan out your finances and expenditures when planning your move.
about moving insurance