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Moving insurance pays for the repair or replacement of your property if it's damaged while being moved or transported by a moving company. It comes in three forms: released-value protection, full-value protection and third-party liability protection.
Strictly speaking, only third-party liability protection is an actual form of insurance. Released-value protection and full-value protection are provided by moving companies instead of insurers. Both forms of protection are called valuations, not insurance policies. Movers aren't licensed to sell insurance, so their valuations are regulated by the U.S. Department of Transportation.
What does moving insurance cost?
The cost of moving insurance depends on which of the three options you choose. Since your regular homeowners or renters insurance doesn't protect your items from damage that occurs while movers are transporting your property, you'll have to calculate any moving insurance you purchase separately.
Moving companies typically offer full-value protection for a fee that's separate from the cost of transporting your property. Typically, full-value protection costs 1%–2% of your property's value — but this figure varies with different moving companies.
When you decide to purchase full-value protection, you'll have to calculate the worth of your belongings and itemize the property you want to insure. Your movers will use this number to calculate the valuation's compensation limit. This limit works the same as a regular insurance policy. If your moving company is transporting $25,000 worth of your property, you'll have to pay $250–$500, and coverage won't exceed $25,000 worth of damage.
If you suffer a loss, the moving company will pay to repair the damage, replace the item with a similar item or make a payout equal to the item's current market value.
Your full-value protection won't cover very expensive items, such as jewelry or antiques, and it also usually won't cover property that's worth more than $100 per pound. As an example, this means that a 4-ounce bracelet would be excluded from coverage unless it were worth $25 or less.
Unlike full-value protection, released-value protection doesn't come with any extra fees. Your moving company offers it for free so long as you request this coverage and sign a contract to activate it.
However, the coverage that released-value protection offers is not very extensive. This type of coverage only compensates you 60 cents for each pound of your damaged items. Imagine your 35-pound flat-screen TV is dropped and cracked by the movers. Under released-value protection, the moving company will compensate you $21 for that damage.
If you're worried about your property being damaged while it's in transit, it's a good idea to consider choosing another form of protection — especially if you're moving expensive items. But, since released-value protection is free, you should consider activating it even if you don't think it would cost very much to replace.
If a piece of furniture is damaged, such as a chair or a sofa you've had forever, you would still receive some compensation from the moving company if you had released-value protection. With compensation of 60 cents per pound, a damaged 50-pound chair would be worth $30 — far from an insignificant amount for a piece of old furniture.
Third-party moving insurance
If you have released-value protection, you can supplement your coverage by purchasing a third-party insurance policy you moving company might offer. This type of coverage is a form a liability insurance. With this coverage, your moving company will still compensate you for up to 60 cents per pound of damaged property. Working with an insurer, the moving company will use this policy to make up the difference up to the limit of your policy.
Typically, the cost of third-party moving insurance depends on the amount of property you're transporting and how far you plan to move. Often, companies weigh your property and charge a fee of $1.25 multiplied by its weight. For example, insuring 1,000 pounds of property will cost you $1,500.
Each moving company calculates the cost of this coverage differently, but you can help yourself knowing how much your items are worth by keeping an inventory as you pack. Assess your property's worth and use that figure as a starting point when discussing the coverage and cost of a third-party moving insurance policy with your mover.
Again, it's important to remember that expensive items such as jewelry won't be covered. Your coverage can also be determined by how your items were packed — as well as who packed them. For instance, your policy may only apply to boxes that you haven't packed yourself.
Do I need moving insurance?
Although you aren't legally obligated to buy moving insurance or valuations, it could be a great idea to invest in these policies — especially since they aren't very expensive. It depends on how much the items you're transporting are worth. If you plan to move expensive items, such as paintings or jewelry collections, some companies specialize in moving (and insuring) these uncommon items.
For inexpensive or replaceable items, a released-value protection policy could be sufficient, even without an extra third-party supplemental liability protection. For others, you might be more comfortable moving your more expensive items with a full-value protection policy attached.
If you're moving your items yourself, your existing homeowners or renters insurance policy might give you some coverage. If this is the case, you could get floaters and endorsements for valuable items. You could also increase your coverage to secure against any perils as long as your policy does not specifically exclude in-transit coverage.