When you hire a professional mover, your contract will automatically include a low level of valuation coverage (aka liability coverage) called “released value protection.” If you’re trying to stay within a tight moving budget, you might be tempted to opt for this level of coverage because it doesn’t carry any additional expense.
Under federal law, moving companies must also offer you another, more comprehensive, level of liability coverage called full value protection. You’ll need to choose between these two options before you sign on the dotted line. Some moving companies may also offer you the opportunity to purchase an additional, third-party moving insurance policy if you opt for released value protection.
If all of this sounds a bit confusing and you’re unsure which option is best, our team at Ace Moving & Warehousing has you covered. Let’s take a look at everything you need to know about your various moving insurance options and how to determine which one is right for you.
Valuation Coverage vs. Moving Insurance: What’s the Difference?
Understanding the difference between valuation coverage and moving insurance is integral to conducting a successful relocation. While many people (mistakenly) use the terms interchangeably, these two coverage options are vastly different.
Valuation Coverage
You’ll typically notice multiple levels of liability coverage offered in your moving contract; these liability options are known as valuation coverage. Valuation is simply the amount of liability your moving company will accept should your possessions incur damage or get lost during transport.
Each liability level offers a corresponding level of financial reimbursement, but keep in mind: Valuation is not moving insurance, which means it only provides limited coverage.
With valuation coverage, the Federal Motor Carrier Safety Administration allows your moving company a few different options for reimbursing you in the event of damage or loss.
These include:
- Providing cash reimbursement (Actual Cash Value coverage) for the item’s market replacement value or for the cost of repairs.
- Repair the damaged item.
- Replace items that were lost or damaged beyond repair.
It’s important to note that if you’re transporting items of extraordinary value (meaning they’re worth more than $100 per pound) you must explicitly inform your moving company in writing.
You’ll need to identify these items on the bill of lading before you move because even with full value protection, your movers can limit their liability for such items if they’re not specifically listed on your shipping documents.
When such items are listed on the bill of lading, however, your movers are responsible for getting them to your destination safely.
Moving Insurance
Low-level valuation coverage comes standard when you work with a professional moving company, and you’ll have the option of paying extra for higher levels of coverage. Full-fledged moving insurance, however, does not.
Purchasing additional moving insurance protects you from financial loss should anything happen to your belongings that the moving company’s valuation does not cover.
If you’re transporting a lot of valuable items, it’s almost always in your best interest to opt for full-fledged moving insurance.
What Is Released Value Protection?
All legally operating, insured moving companies are required to carry and provide you with basic carrier liability – that’s what released value protection is. If any of your belongings suffer damage or get lost during the move, this level of coverage will reimburse you $0.60 per pound, per item.
For example, let’s say your movers were loading up your 20-pound, 50-inch flatscreen TV and accidentally dropped it, causing irreparable damage. If you chose the released value protection coverage, that coverage would only reimburse you $12 for your expensive TV ($0.60 x 20 pounds).
By law, the moving company is not required to reimburse you any more than that. So, while released value protection won’t cost you a penny extra, it doesn’t offer much in the way of protection or reimbursement for anything that might get lost or damaged.
Obviously, $0.60 per pound, per item, doesn’t even come close to the actual value of your fragile belongings or even the less expensive stuff you might be moving.
What Is Full Value Protection?
Under federal law, all moving companies must also offer you a higher level of valuation coverage called full value protection. This level of coverage will reimburse you for the full (current) market value of any item that suffers damage or gets lost during your move.
But – and this is very important – your moving company is legally allowed to limit their liability (aka reimbursement) for items of “extraordinary value.” Those items include anything you own that’s worth more than $100 per pound.
However, when you declare those items in writing on your shipping documents, the moving company will not be able to limit their liability for them. If a declared, high-value item gets lost or damaged during your relocation, the movers must reimburse you for the item’s full, current market value.
Unlike released value protection, which is essentially free, full value protection carries an additional expense. But what you’ll pay for a full value protection plan varies from mover to mover. Depending on the company, you may be given various deductible options to choose from that will ultimately impact the plan’s cost.
Should You Choose Released Value or Full Value?
If you don’t explicitly choose released value protection and sign a statement indicating your choice, the moving company will automatically choose full value protection for you. And the cost of that plan will then be added to your bill.
Which option should you select? Ultimately, the choice is yours and only yours to make. If you want to risk not being properly compensated in the event of item damage or loss, that’s your risk to take. Just remember the TV scenario we went over earlier: you’d get a measly $12 for a flatscreen that likely cost you $1,500+.
If you want more peace of mind knowing you’ll receive reimbursement for the actual value of any damaged or lost goods, go with full value protection. It might cost you extra, but if you’re moving anything of substantial value, you have a lot to lose.
A higher level of protection could end up being more than worth its cost.
Moving Company Valuation Coverage Exclusions
Anything that happens to your belongings that is out of the moving company’s control will not be covered by any form of valuation coverage you get through your movers.
“Acts of God”
If your belongings incur damage as a result of a hurricane, tornado, fire, or earthquake, your movers are not liable.
Do-It-Yourself Packing
According to FMCSA, if you pack your own items, and they incur damage, it can be difficult to determine whether the damage was due to improper packing caused by the moving company.
And because that’s challenging – and in some cases near impossible to conclude – you won’t be reimbursed for any damage your belongings may incur. For peace of mind, consider hiring professional movers and packers, so you get the benefit of liability coverage.
Late Damage Report Submissions
If you fail to report damage or loss in a timely manner (typically within nine months) your moving company may not be required to reimburse you.
Non-Allowable Items
If you pack your own boxes and include perishable, hazardous, or dangerous materials, your movers may not be liable for damages.
Not sure what you’re not supposed to pack? Check out this full breakdown of non-allowable items, so you don’t pack anything that could rob you of your reimbursement.
Third-Party Moving Insurance: What You Should Know
In addition to released value protection and full value protection, you can also opt to purchase third-party insurance for extra coverage. If you’re moving very valuable items, this type of insurance may benefit you since it’ll reimburse you over and above what a moving company’s valuation will pay out.
But should you really get it? That depends.
First, understand that any third-party coverage you might be offered is not regulated by federal law. It’s optional coverage governed by state laws. If that makes you wary, you may want to pass.
Second, if you have homeowner’s insurance or renter’s insurance, your policy may have some degree of moving coverage built in. Before you purchase insurance from any source, read over your existing policies to find out what they include, if anything.
Often, people prefer to obtain insurance through their moving company to keep all of their costs bundled together and easy to track. But if you can find a reasonable price elsewhere, you may want to take advantage of it.
Do You Have to Purchase Supplemental Moving Insurance?
You do not have to purchase any supplemental moving insurance. However, if you decline, you will only be covered under the released value protection insurance.
Most electronics, furniture, and heirlooms are valued at a price higher than the $0.60 per pound would cover. So if you choose to decline full-value protection coverage, you’ll likely want another type of insurance just in case.
Supplemental insurance offers you the value of your item, rather than a flat, per-pound rate. This helps to ensure you are properly compensated and can replace those items should they become damaged or go missing during your move.
Where Can You Get Supplemental Moving Insurance?
Many insurance companies offer moving insurance. So if you’re interested in purchasing it, contact the insurance company you have other insurance policies through to find out if they offer it. Or, you can search online to see who offers it.
Keep in mind, though, that due to the amount of business most moving companies do, they often offer the most reasonable rates for moving insurance. But you should always take the time to shop around if you are on a tight budget and looking for the best deal on moving insurance.
Ready to Hire a Moving Company Near Minneapolis?
If you are looking to move soon, don’t hesitate to get in touch with our team at Ace Moving & Warehousing in the Twin Cities! We’ve facilitated thousands of local and long-distance, residential, and commercial relocations over the last 10+ years and offer a wide variety of moving services to suit virtually any need.
Whether you’re looking for transport service, full moving and packing services, climate-controlled storage, or a fully customized move plan, we’ve got you covered.
To learn more or get a quick moving quote, give us a call today at 763-755-2045 or request an estimate online, and we’ll get in touch!