Moving Company Insurance Policies
Is a Moving Company Liable for Damaging My Possessions?
Yes, federal law does require all moving companies to provide a minimum amount of coverage to your possessions when you move. However, the amount is usually minimal. If you are crossing state lines, then a moving company is liable for 60 cents per pound of your possessions. If you are moving within the state, then each state has its own minimum, but it is usually around 30 cents per pound.
Since the weight of items for an average move ranges from about 1 ton (small apartment) to 7 tons (large house), this works out to between $1,200 to $9,000 of protection. Considering an average TV weighs about 10 lbs, should the movers smash it, they would be liable for only $6, obviously far less than the replacement value. This is why you should very carefully consider purchasing additional insurance when hiring a moving company.
What Kind of Additional Insurance Can I Get?
Federal law requires that movers offer these three kinds of insurance:
- Declared Value Protection: Under this plan, the weight of your entire shipment is multiplied by $1.25, to arrive at the total amount of liability (a 4 ton shipment would then be protected up to $10,000). However, each individual item is protected for its full depreciated value. So if a $1,000 stereo suffers $200 worth of damage, the company will pay $200. If it is lost, they will pay the full $1,000. However, they will never pay out more than the maximum amount of coverage, so if they lose 15 TVs at $1,000 each, they will still only pay $10,000.
Assuming the moving company isn't planning on breaking all your items, however, this plan offers a good deal of protection at low cost. The price is usually $7 per $1,000 of liability given.
- Lump Sum Protection: If your possessions are worth significantly more than their poundage (you are only transporting plasma screen TV's, for example), then you can declare the actual value of all the items, instead of simply doing the $1.25 times poundage requirement above. The moving company will then assume liability for that entire amount, but will still charge $7 per $1,000 of liability. This is a wise choice for moving art work, jewelry, and other high-end items that are worth much more than they weigh.
- Full Value Protection: This is the most comprehensive of the three packages, and insures that the mover must replace or repair all of your items to their original value (there is no limit to the coverage). Since this completely protects your items, it is naturally the most expensive, but the actual price will vary between companies. The price is also affected by how much of a deductible you are willing to provide (usually in $250, $500, and $1,000 increments).
Are There Any Other Protections I Can Take?
Some states do not hold moving companies liable for anything they do not pack themselves, so you should ask your company what its policies are in that field, and pack by hand only your less expensive items. Also, you should always research your moving company thoroughly before entrusting your possessions to them, as the industry is rife with scammers and extortionists.
If you still own your previous home, your possessions may be covered by homeowners insurance, which is far more protective than any of the above policies. However, since most people move only after they sell their home, it may not apply. Be sure to contact your homeowners insurance representative to learn more.
Do I Need an Attorney?
It can be very difficult to successfully sue a moving company if something goes wrong. If you have suffered damages from a moving company, or they refuse to deliver/have lost some of your items, a skilled attorney will be essential in getting your items or damages back. The federal laws involved are extremely complicated, so you should contact an attorney immediately who can explain exactly what sort of rights and coverage you have.
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Last Modified: 11-22-2011 04:41 PM PST
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