Insurance valuation options are not simple to understand quickly, so please ask as many questions as you need to before deciding. There are four types of valuation coverage for shipments that are loaded by a local moving agent (and the shipment is professionally inventoried); self-loaded customer shipments are only eligible for option 2 below:
1. Default Valuation (no purchased coverage; $0.60/lb payout)
2. Total Loss, or “Named Perils” coverage (if the entire shipment is lost or damaged)
3. Full-Coverage Moving Insurance (generally pays out 12-18 times as much as default coverage, and High-Value items are at replacement value)
4. Default Valuation--- If you choose not to purchase any valuation coverage, the compensation is $0.60/pound/article. We will use a couch vs. stereo system in a box example for the damage/loss payout:
A. If you have a damaged couch that weighs 200 lbs, the compensation would be 200 lbs x $0.60 = $120.00.
B. However, if you have a damaged $500 stereo system in a medium box that weighs 30 lbs, then the compensation would be 30 lbs x $0.60 = $18.00.
In other words, it does not matter what the value of the damaged item is, it only matters what the weight of the item is. The average item is significantly damaged only around 1% of the time; smaller shipments with 50 or less items often have zero damage. However, please keep in mind that even if the damage was obviously caused by a local agent at the origin or destination city, there is no guarantee of compensation over $0.60/pound/article by our company or the local agent. This is why our company highly recommends purchasing valuation for moving:
Total Loss / Named Perils Valuation: Only covers catastrophic loss/damage to the shipment. $20 for every $1000 insured. This insurance would cover your contents if the ship sank, the truck your shipment is in being destroyed in an accident, etc. The chance of a total loss for the shipment is extremely small (less than 0.1%) but some customers do feel more at ease purchasing it.
Full-Coverage Valuation --- For every 1000 lbs of estimated weight you have before your move (or one crate), $8000 of valuation is recommended, for a $320 flat rate, or a $40 cost (premium) for every $1000 of items insured. This means that for the base coverage of your shipment, up to $8 of compensation is generally offered for every pound of item damaged/lost (which is over 13 times as much as if you did not purchase valuation; that payout is $0.60/lb as mentioned above). If an item can be repaired, or an equivalent one can be purchased for less than the maximum payout, the insurance company may instead employ one of those methods.
If you have packed your own boxes (packed by owner, or PBO), please let us know ASAP, and we will send you special valuation forms to fill out. This is at $10/lb, so est. 1000 lbs is $10 K.
Filing a claim: Although significant damage happens to an item less than 1% of the time, it can happen, statistically more for larger shipments that have more than 100 items. You generally have 45 days (6 weeks) to file a claim after your shipment is delivered. Check off the inventory as items are brought into the new residence – any/all missing inventoried items must be noted on the mover’s documents at the time of delivery. Payment will not be made for undocumented claimed missing items. Do not discard or repair damaged items without written authorization to proceed. If the item can be repaired, it will probably be repaired. If it cannot, then it will be replaced by an equivalent item, or a check will be mailed to the customer instead.
How to Avoid Insurance Claim Rejection --- There are three hypothetical examples below on insurance rejection (that are based on real occurrences from past claims to our company or to the moving insurance company).
A. No Valuation Coverage Purchased: Customer declines moving insurance. One table is damaged during transit. Weight of the table is 100 lbs. Customer lists the original purchase cost of the table as $500 and asks for $500. Default insurance payout to the customer is $0.60/lb/article, which in this case is $60. The customer now says they declined insurance because they hired professional movers, and thought nothing could ever possibly happen to their shipment. As mentioned earlier, damage to each item only averages around 1%, but if someone has a large move with over one hundred items, it may happen statistically, no matter how carefully the crate or container was loaded. Damage happens to some shipments even with the best moving companies, although it happens much more often with less reputable ones.
B. Shipment Goes into Storage, Damage Found Later: The customer needs the shipment to go into storage. They are advised by our company to inspect the outside of all boxes and wrapped furniture for any damage, but for some reason they do not inspect the shipment while it’s going into storage. Customer signs the delivery documents, and no damage is noted. Customer then takes out the items a few months later from the storage unit, and places them in their new residence. After several days/weeks of unpacking boxes and unwrapping furniture, they notice some damage and file a claim.
Unfortunately, no insurance company will pay out a claim after delivery documents were signed into storage. The shipment was moved into storage by a professional delivery company, and the moving insurance ends at this point (see below about extending insurance). Any damage to the shipment needs to be noted immediately, not two months later after the shipment is moved again by someone else, either by the customer themselves or by local movers or friends that were never contracted by our company. The customer can extend moving insurance while it’s in storage, but a professional moving company (who inventories the shipment) must be involved in the shipment’s delivery into residence, not a few guys and a truck with no inventory sheets, or friends/relatives helping, who have no experience with international moves.
C. High Value Inventory Form Not Filled Out: A customer has a large move, and purchases $50,000 in moving insurance. Our company asks them to list all items over $1000 on the application, but they do not do this. The customer has some damage to the large shipment, and files a claim for $20,000 total, including one item that is worth $10,000. The insurance company then looks for all items over $1000. The $10,000 item was not additionally insured as high-value over the base coverage, and so the payout may be much less than $10,000, since the item was not listed on the form, and additional coverage for that item was not purchased.
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