Many people assume that the moving company is automatically insured and that they are covered if something goes wrong. After all, movers are federally required to insure items, aren’t they? Well, yes, technically but that’s only for interstate moves.
And, the insurance they are federally required to have is not based on the value of the items but on the weight of them. So, if that gold collection of yours takes a hike, you will get a very small fraction of its value back.
But won’t your insurance kick in then and cover the rest? Actually, here’s the problem – unless you specifically go to your insurers beforehand and arrange the insurance, they don’t owe you a cent. They can, quite rightly, claim that the items were not at the location you specified when insured and that the moving company is liable.
If the moving company does not have adequate insurance, you can try to sue them for the damages, but you could end up getting short shrift anyway.
Look Out for Valuation
In the contract, the company should lay out what levels of cover they offer in the case that something is damaged or lost. This should not be confused for insurance, though – it is the amount that the company will pay out.
The problem with this “cover” is that it only applies to things that the mover can control. So, if a worker drops a vase, they should pay out. If the truck is hit by a car, they will consider that out of their control. Or if a tornado hits, that’s another example.
You could also be on the hook for the replacement cost of anything that is valuable if you did not tell the mover about its value before they left. If the items are valuable, you need to ensure that they are properly covered.
Released Value Protection
This is what is federally mandated. The mover must pay 60 cents for each pound that your item weighs. It’s really miniscule protection when you think about it – if something that weighs ten pounds breaks, the law says that all the company is liable for is $6.
This might differ depending on the state that you are in so it is worth checking on this. However, you will no doubt agree that this really is not sufficient cover.
Full Value Protection
This is another possible insurance coverage offered. It is a lot better than the Released Value protection because it will cover you for the cash value of the item. It still isn’t ideal, though, because it is not the replacement value of the item.
Actual Cash Value Coverage
In this case, the movers will have to make reparations for the damaged item as follows:
- Repair it
- Replace it with something similar
- Or pay out the replacement cost.
This is the best protection but will cost more. It does not, however, cover items that are extraordinary value.
Full Value Protection
This is necessary when you have items that are high value. You will need to pay a lot for this but it is the safest way of ensuring that you get the correct value paid out to you in the event that something goes wrong.
It is important to find out whether the company is insured and what insurance they offer before you sign the contract. If you do not, you could end up paying dearly for the mistake.