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Opening up the back of the moving truck so you can start unloading, you find disaster! The straps on your big screen QLED TV came loose—and not only is it completely trashed, it’s smashed your good china and the antique end table you inherited from grandma.
A dozen questions run through your mind: “Does my insurance cover the damage?” “Will the moving company’s insurance cover it?”
Unfortunately, the first time many home sellers think about moving insurance is when it’s too late. Between the closing fees and home preparation costs, you feel so nickeled and dimed that it’s tempting to opt out of this additional moving expense.
With the help of moving insurance experts in the field, we’ll help you sort through:
- Does your homeowners insurance cover your belongings in transit?
- Do you need the bare minimum moving insurance or full value protection?
- Are your items insured post-move?
- Are you working with reputable movers who will take special care of your possessions?
If you at least know your options and what level of coverage you need, you won’t be left broken-hearted over your broken belongings.
Homeowners insurance policies may or may not cover damage in transit
One of the big reasons to get a homeowners insurance policy is so that your personal belongings are covered in the event of a fire or theft. This same policy may also cover damage that happens during a move—although that coverage may not be as extensive as you want or need.
“Our homeowners insurance will cover property while being moved, but there are limitations for such things as valuable items and breakage of fragile items,” says Bob Buckel, vice president and product manager for Erie Insurance, an established multi-state insurance company founded in 1925. “What you need to know is whether your policy covers belongings for ‘named perils’ or ‘comprehensive perils’ coverage, which is sometimes referred to as ‘all risk.’”
If your policy only covers named perils, your personal property may not be covered at all once it leaves your old house. And it won’t be covered again until it’s moved into your new home (assuming you’ve purchased a new policy for the new property).
“Better homeowners policies come with comprehensive perils, which includes coverage for collision or upset,” explains Buckel.
“So if the moving van is involved in an accident, and your belongings are damaged, your policy would likely cover that, whereas a named perils policy most likely would not.”
Even if your homeowners policy covers personal property damaged during your move, that doesn’t mean you get brand new replacements for free.
You’ll still have to pay your deductible, which may be anywhere from $500 to $2,000 or more. Plus, your policy may only cover fair market value or actual cash value, instead of full replacement coverage.
Taking depreciation into account, this means you may only get reimbursed for what you could sell your “used” belongings for—so your insurance company may only cut you a check for a few hundred dollars to cover your $2,000 antique.
Of course, there are some homeowners insurance policies that won’t cover property damaged during a move at all. Other policies require additional coverage for property such as jewelry, cameras, and musical instruments.
The smart play is to contact your homeowners insurance agent well before the move to find out exactly what your policy covers. In some cases, you may be able to get add-ons to your policy that will better cover you during your move.
If not, your insurance rep may suggest paying extra for moving insurance provided by your moving company.
What does a moving company’s insurance policy cover?
The good news is that according to federal law, the moving company is liable for the value of the personal property that they transport for you.
This does not mean that they are required to pay the full cost for repairs or buy you brand new replacement items.
In fact, the minimum amount of liability coverage they’re required to provide might surprise you.
Known as Released Value coverage, this most basic level of moving insurance is provided by the moving company at no additional cost.
But it doesn’t cover much.
“It is legally mandated that licensed movers offer ‘Value Insurance,’ which is technically not insurance, but ‘coverage.’ This level of insurance only offers $0.60 per pound, per item towards replacement or repair. Do the math and it’s a very basic level of coverage, albeit free,” warns Mike Glanz, CEO of Hire A Helper, a site that’s been helping consumers compare local mover reviews and pricing since 2006. “Heaven forbid the movers drop your 30 pound, $500 flat screen TV. With this standard coverage, you’d only see an $18 check to cover your broken $500 TV.”
If you need better coverage than that, you’ll want to pay for Full Value protection.
“Just like it sounds, Full Value replacement covers the full value of every item listed in your inventory. This coverage is generally available as a paid upgrade, but it’s relatively cheap,” advises Glanz. “For example, at HireAHelper, Full Value insurance can be purchased for $9 per $1,000 of coverage requested.”
Even Full Value coverage has its exceptions, though.
Movers can stipulate limitations within Full Value coverage for items of extraordinary value that exceed $100 per pound—such as jewelry and antiques.
And your movers have three options if anything is lost, damaged or destroyed. They can:
- Repair it
- Replace it
- Make a cash settlement
That cash settlement is where things get tricky. The settlement may just cover the cost of repair or the current market replacement value—which takes depreciation into account.
You should also be aware that movers are probably not liable for boxes that they didn’t pack themselves. So if you’re hiring professionals, feel free to pack non-breakable items like cookware and clothes, but leave the packing of fragile items to them.
If you’re really concerned about having enough moving insurance coverage, it may make sense to get liability coverage from a third-party insurance company.
Depending upon the type of third-party policy you purchase, this insurance will cover your loss beyond the basic Released Value coverage provided by the movers.
No matter how much moving insurance coverage you get, the hope is that you never need to use it.
Hiring a reputable mover matters even more than insurance
The best way to ensure that your belongings arrive intact is to hire a moving company you can trust.
If you’re moving from one state to another, the U.S. Department of Transportation (DOT) offers both Search by Company and Search by State features to determine if the movers are properly registered with DOT. Any registered interstate moving company must be licensed and insured.
These lists aren’t comprehensive, though, and may not include movers who only operate within the state.
So how do you find a trustworthy mover? Your best bet is to ask the real estate agent who helped you sell your house for a referral.
“We have a list of preferred movers based upon information we’ve received from past clients,” advises Ken Carpenter, one of the top 1% of sellers’ agents in Plymouth, Minnesota. “And we tell our vendors that if we ever get a complaint, we’re never going to refer to them again, because we can’t afford to give a bad referral.”
What about post-move insurance?
You’ve made it through the move (hopefully with minimal dings and scratches) with enough moving insurance to cover any damage. You’re settling into your new home and your belongings are now covered by your new homeowners insurance policy.
But your previous home still hasn’t sold. So, you’ll just have to maintain your old homeowner’s policy until it sells, right?
While you do need to have insurance on your previous home until the sale closes, you won’t be covered by simply maintaining your current policy. Once your previous home is no longer your primary residence, your homeowners insurance policy on it may no longer be valid because it’s considered a vacant property.
Typically, a property is deemed “vacant” if the house remains empty for a period of 45 to 60 days. This timeframe varies by policy and insurance company, so some may be considered vacant after 30 days or less.
“I had a client who kept her regular homeowner’s policy in place after moving everything out of her previous house. And within a two-week span, a tornado came and ripped the top of the house off,” says Collier Swecker, a top-selling real estate agent in Hoover, Alabama.
“After the tornado, the adjuster came through and noticed there were no clothes or furniture. He said, ‘This is a homeowner’s policy. So she doesn’t have coverage because this was a vacant home, not an occupied home like her policy covered.’ So you don’t want to put yourself in that situation where you don’t have the right policy in place.”
You have several options to ensure your previous home remains covered after you move out. First, you could leave enough furniture in place so that it doesn’t meet the criteria of a vacant home.
Second, you can check with your existing insurance company to see if you can get a vacancy endorsement added to your existing homeowners insurance policy.
If neither of those options work out for you, you may need to cancel the existing homeowners policy and purchase vacant home insurance.
Selling a home and moving into a new one is an expensive process, so it makes sense that you’d want to cut out any unnecessary expenses. However, it may cost you more in the long run to replace damaged property out of your own pocket.
Savvy sellers know that the best way to minimize the risk of damaged, lost, or stolen property is to hire movers you can trust and make sure you have the right insurance to cover your beloved belongings during the move.