If you asked me about the most common questions I get asked on a regular basis from my time spent in the moving industry, instantly two stand out from the rest. The first being, "How long does it take for my stuff to be delivered?" And the second most common question always relates to moving insurance. From what types of insurance options are available to what does my insurance cover? We wrote a blog about how long, long distance deliveries take related to the first question here.
I've decided to write about the main things I consider when talking to a customer about moving insurance. What is, or at least should be on most customers' minds is how much insurance typically costs. Moving insurance is expensive and just because of this, people think it covers a lot more than it actually does. For example, with the emergence of stores like IKEA, presswood and particle board furniture has grown in popularity. The attraction is the cost of the furniture (Although I do not believe you save much, but hey, to each their own) but, with lower priced furniture comes lower quality, which essentially means they are at a greater risk for damage. It did not take long for insurance companies to pick up on this, and the majority of them have decided they will no longer insure furniture of this quality, no matter how much you pay for insurance.
So with that in mind, let's go over the reasons why you should purchase insurance coverage, and the reasons you shouldn't.
**A brief disclaimer: No one, not even a moving consultant, should ultimately decide for you whether or not you buy additional moving insurance. Please do not confuse advice of whether you should or shouldn't as something that you must absolutely abide by. At the end of the day, that choice should only be made by the customer. Thank you.**
3 Reasons Why You Should Buy Additional Moving Insurance
1. To Reduce or Eliminate Risk
Insurance is essentially managing if not eliminating risk. The only reason people get insurance in the first place, is because they are nervous or concerned some items may be damaged and want to be protected in the case anything goes wrong. The standard DOT (Department of Transportation) insurance at 60 cents per pound per item does not offer the coverage needed to actually make a difference and help someone sleep at night.
So what people do is they purchase additional insurance through Baker International or Movinginsurance.com. This will help ease your mind somewhat by knowing if worse comes to worse and something ends up missing or damaged, you can get the full replacement value of that item. Remember to know the differences between full-replacement value protection and depreciated-value protection. If given the choice, always elect full-replacement coverage.
2. You Are Moving Long Distance
The procedures of a moving company differ based on what type of move they are doing. Local moves are pretty straightforward. The movers arrive with an empty truck, usually a small box truck will do, and when they are finished they should end up with the same empty truck they came with. Long distance moves by their very nature take a little longer. Your stuff may move between a smaller truck and a bigger truck at least once (See Shuttles), and are generally inside trucks that are not climate controlled for extended periods of time depending on how far away you are moving.
The point of this is to think about the likelihood of damages taking place. While damages as a whole are rare, especially when packed properly, they are more likely to happen during a long distance move than a local move. This should factor into your decision when thinking about purchasing additional insurance.
3. The Value of Your Household Goods Exceeds The Final Cost of Insurance
Notice how I said, "The final costs of insurance." What I mean by that is not only the cost for insurance but also the deductible associated with the coverage. Most insurance companies will offer you a certain amount of coverage up to a monetary amount, like $50,000.00 for example. The may charge you $800.00 for that amount of coverage but more likely than not it has a deductible associated with it, usually $250 is standard. So what that means in the above example is if you have any damages with your move and file a claim, you are going to pay $1,050.00 before you receive a penny for your damage. Knowing this, it is important to consider the cost of insurance compared to the actual value of the item you want coverage for. It makes no sense to file a claim for a $500 coffee table with this amount of coverage, because you can just go buy the exact coffee table yourself.
3 Reasons Why You Should NOT Buy Additional Insurance
1. If Insurance Will Not Cover Your Household Goods
This headline probably seems a little off to you. Why would you buy insurance if it doesn't cover you for what you have? Well of course no one would, but the problem is a lot of people do not take the time to ask the questions that are necessary when buying insurance. There are restrictions and policies for every insurance company. While they may differ from company to company, a lot of the policies and restrictions on insurance are the same. Insurance companies generally agree that the following items will not be covered.
1. Boxes that are PBO (Packed By Owner) This includes TV's packed in boxes by YOU.
2. Presswood or Particle Board material. Think IKEA furniture or any furniture you put together yourself with those wooden pegs and screws.
3. If you have damaged electronics that will not operate properly but have no physical evidence of damage.
We move a lot of people who fall into at least one of those categories. It just doesn't make sense to purchase coverage for something that doesn't do anything for you.
2. You Have a Very Small Local Move
You read earlier that damages with local moves are very rare. When considering that and also the cost of insurance, it does not make sense to purchase additional coverage for your stuff. Chances are insurance will be more than you are willing to pay, because it exceeds the value of your goods. On top of that, local moves are done within a day. So your furniture is not handled much which decreases risk for damages, which is the point of getting insurance in the first place.
3. You Have Renters or Homeowners' Insurance That Also Covers Goods in Transit
Many people do not know that some renters or homeowner insurance policies cover your household goods while in transit. If you have one of these policies, it is worth your time to give your insurance agent a call. Even if you have a policy that does not cover your items while being moved, they often can add additional coverage at a better rate than moving insurance companies can.
Here is a video summarizing the three main types of insurance coverages. As always, if you have more detailed questions, feel free to give us a call at (617) 923 - 3700 and a moving consultant will be more than happy to answer any question you may have.
Feel Free to download this infographic below.