1. Insurance & Valuation: Protecting Your Household Goods Moving to Alaska … or anywhere!

    June 17, 2011 by Editor

    One of the greatest concerns that anyone has when considering a move whether it be moving just a few miles away in the same town, moving across the country, moving from the lower 48 states to Alaska or moving to the other side of the world  – centers on one or two simple questions.

     “How Can I be Sure my Belongings will Arrive Safely?”

    “What are my Options when Protecting my Belongings?” 

    Whether it be the heirlooms that have been passed down through generations with more sentimental value than perhaps cash value or bonafide valuable articles with significant cash value, the options available to you can be narrowed to two basic choices with moving companies.  These are Replacement Coverage which has other names like Full Value Replacement Coverage, Maximum Value Protection to name just a few. 

    Other options available outside of moving companies in general are available through some homeowners’ insurance carriers and some renters’ insurance carriers.  Right at the outset, it would be most helpful when determining your best choices by seeing what you may already be paying for and may not realize it.  The very first step is for you to contact your insurance agent that takes care of your homeowners insurance policy or your renters insurance policy.  Ask if your policy covers transportation of your household goods in a move from your current residence to your new residence wherever that might be.  Coverage can vary from complete coverage at one end of the spectrum to catastrophic coverage in the event a loss is the result of a major accident in which the moving van might be totaled. 

    This will be a detailed look at these options from both household goods moving companies which will be referred to as carriers and what is available from insurance companies that your insurance agent represents.  This can create a little confusion since moving companies are referred to as carriers and insurance companies are referred to as insurance carriers which do the underwriting for the policies that are available for purchase.  When you hear the term “carrier”, it is important that you distinguish between the moving company as a carrier and the insurance company as an insurance carrier.  To help with these distinctions, coverage that is available to moving company customers (referred to as “shippers”) is called Valuation Protection, Valuation Coverage or simply Valuation. 

    Technically, carriers are not able to offer insurance because insurance can only be purchased from a duly state-licensed and authorized insurance agent representing an insurance carrier.  Insurance agents sell insurance policies created or underwritten by insurance carriers.  On the other hand, moving companies (carriers) offer what is called Valuation Protection, Valuation Coverage or Valuation.  We will simply refer to this as Valuation.   Hence, what becomes available to shippers (moving company customers) comes from two different industries – the moving industry and the insurance industry.  This is an important distinction particularly when it comes to settling a potential claim from problems that may occur from a move and the choices you make about your coverage before anyone even picks up a box to load it in a moving van.  We will first examine coverage that is available from the moving industry called Valuation. 

    The term “valuation” comes from establishing a value for your belongings or your shipment.  As a rule-of-thumb, the moving industry uses a value per pound to establish a minimum value from which to base a price for valuation coverage.  Hi-Line Moving Services uses the factor of $5 per pound.  For example, a shipment that is estimated to weigh 1000 pounds would have a minimum valuation of $5000 ($5 X 1000 lbs. = $5000).  This means that if a shipper chooses Valuation, the minimum amount of coverage that shipper can purchase, in this example, is coverage of $5000.  Let’s assume that the shipper has some valuable artwork in the shipment that by itself is worth $5000.  The shipper has the option to acquire greater coverage than the minimum but not vice versa.  The shipper in this case might choose to purchase $10,000 coverage for Valuation instead of the minimum – $5000 to cover the extra value and $5000 for the household goods.  

    Then there are other options for each level of valuation which are available much like the options available by insurance carriers.  Those options are called deductibles.  Deductibles work the same way when settling a claim as with insurance policies.  Hi-Line Moving Services offers $0 deductible, $250 deductible and $500 deductible. To be clear, a deductible refers to the amount of the claim that is deducted from the settlement. For example, assuming a claim is submitting for $350 to replace some broken crystal that the carrier packed.  The shipper purchased $5000 coverage with $250 deductible before the shipment was loaded.  The claim is substantiated and a check is written for $100 to settle the claim ($350 claim minus $250 deductible = $100 payable on the claim).  

    One last word about Valuation…  An important difference between Valuation and Insurance is that Valuation is purchased for the whole shipment.  One cannot purchase coverage for just the one or two items of concern.  Referring back to the example of the shipment with the expensive piece of artwork, let’s assume a major accident occurred in which the artwork was deemed a total loss as was the rest of the shipment.  The shipper purchased $5000 coverage with $0 deductible.  The loss really amounted to $8750 because the other household goods were totally destroyed.  The maximum amount payable on this claim would be $5000 because that is the limit of liability due to the level of valuation coverage purchased.  It should be noted that anything shipped that has a value of $100 per pound or greater would be required to be listed on a High Value Inventory describing the items and the real value.  Otherwise, it would be subject to a lesser value since it was not properly declared.  

    Catastrophic coverage typically does not cover losses due to breakage from neglect,   whether from your own handling when packing your own boxes or neglect of the moving company you select if providing full-service packing at your request.  This typically refers to major damage caused, for example, by a vehicle accident where the contents in the moving van are a total loss or at least receives major damage as the result of a major accident.  This is the kind of coverage most often provided by homeowners’ policies. 

    This all comes down to risk management.  As a customer (shipper) contracting the services of a moving company (carrier), it is very important that you understand what coverage you really have and who to address a claim with.  No matter the claim, the moving company you choose will definitely be involved in resolving the claim.  Make sure you understand who has what responsibility for settling the claim should you experience damage to your belongings.  Nobody wants claims and everyone should be exerting their best effort to reduce the possibility of a claim.  Even so, claims sometimes do happen.  Keep in mind that furniture and household goods are not made or produced with the idea that they will be moved.  Otherwise, that would be a significant factor in the way things are designed.  A professional moving company is one that pays attention to the small details and stays informed of the most current concepts is handling your precious things.  It is in everyone’s best interest that your belongings arrive safe and sound whether you are moving to Alaska or to Zanzibar or anywhere in between.