You’re moving! If you’re a typical American, you’ve probably accumulated more than a few items since your last move and all of your things are valuable to you. Before you drive off with the moving truck, you're going to make sure that your possessions are safely secured and won't get damaged along the way (if you are renting a van or pick-up truck for the move, see Is Rental Car Insurance Worth It?). But are you also going to make sure that they're insured?
Many people don't realize that they can purchase insurance to cover their belongings in case they are damaged or stolen during a move. Is moving insurance a good idea? This article covers the basics so you can decide whether you need that added protection and peace of mind before you move all of your items into your new home.
Coverage Under Homeowner’s Policy?
If you own your home and have a homeowner’s policy, or if you rent a place and have renter’s insurance, your property will most likely not be covered during a move (learn the 6 Reasons You Need Renter's Insurance). Or, if it is, it will likely have only limited coverage. This is not an absolute rule, so check your policy (see The Key Components of Your Home Insurance Policy to learn how to read the industry terms you'll find there) or call your agent or broker before doing anything else.
Some homeowner’s and renter’s policies that do cover personal property during moves limit the amount to 10% of the overall coverage on your home or $2,500 (whichever is greater). If only a few of your possessions are destroyed in the move, that could be sufficient. But if all or a significant part were lost or destroyed, this isn't likely to be enough to make up for the loss.
You might have a policy that covers your property while the movers are packing it up inside your house or apartment, but ceases as soon as it is loaded onto the truck.
Also, all homeowner’s and renter’s policies have deductibles. If your deductible is, say, $1,000, then you have to pay for the first $1,000 of loss or damage. So even if you have some coverage under your policy, you might want to take a look at what is available in the way of moving insurance.
One last point here: if you don’t have a homeowner’s or renter’s insurance policy now but will have one when you move into your new home, or are changing insurers as a result of the move, check the new policy to see if it will cover you during the move.
If your policy does cover you during moves and you are satisfied that the coverage is adequate, then you’re set to go! Otherwise, read on and consider other policies you can purchase.
Types of Moving Insurance
Full Replacement Value — Valued Inventory
This type of moving insurance provides the most thorough and fullest coverage available.
In case of loss, there is no reduction in the settlement amount due to depreciation in the value of the property or due to coverage under another insurance policy. There might, however, be a deductible.
Say, for example, that you bought a big easy chair in 2009 for $700, but the same chair today costs $1,100. If the chair was lost or destroyed in the move, you would be reimbursed $1,100. Also, if your renter’s or homeowner’s policy provided some coverage, you would still receive $1,100 (the renter’s or homeowner’s policy, however, might have a reduction due to co-insurance).
Note that prior to the move you must prepare an itemized list of your personal property, including value. This is worth doing in any case in the event of a claim later against your homeowner’s or renter’s policy. Taking photographs of especially valuable items is also a good idea.
This insurance is available for all moves: intrastate (within one state), interstate (one state to another), and international.
Full Replacement Value — Lump Sum
This coverage is available for interstate and international moves and is similar to the valued inventory.
You will need to prepare an itemization of personal property, including value. Items worth less than $500 or thereabouts need not be listed (the amount will vary from insurer to insurer).
Typically you must insure for at least $8.00 times the total weight of your shipment. So, if your shipment weights 2,000 pounds, you must insure it for a minimum of $16,000. If you have many high-value items, you can, of course, insure for more.
Coverage Through the Moving Company
In most states, moving companies are not allowed to sell insurance due to the potential for fraud. But there is basic, minimum coverage provided automatically—usually in the ballpark of $0.60 per pound. If you suffer any significant loss of or damage to your property, however, this will be inadequate.
When to Get Started
Don’t wait until a few days before the move to look into insurance. Many policies require the preparation of an itemized list and, in some cases, the specification of replacement value. This won't be easy to do during the frantic last few days before a move, especially given that you should photograph valuable items.If you have homeowner’s or renter’s insurance, you will want to begin by reading that policy and calling your broker or agent to see what coverage is available under it (learn more about what these professionals can do for you in What Is an Insurance Broker?). If you are switching insurers due to the move, also check the new policy. If the coverage is inadequate, ask the broker or agent about moving insurance. This will also take up some of your time and should not be left to the last minute.
Moving insurance is usually very affordable, so unless you have completely adequate coverage under a homeowner’s or renter’s policy, it’s almost always worth it to at least compare the coverages and prices offered by different companies. These will vary from state to state and from insurer to insurer