Moving Insurance Tips: Do You Need to Buy Extra Coverage?
How Your Home Insurance Can Help Insure Your Move and What to Ask About
Congratulations you found your new place! Now for the stressful part: Planning the move.
Whether you are moving on your own or hiring a moving company to move your stuff for you, insurance is something that you should consider to protect your personal property during the move.
What most people don't realize is that homeowner, renter and condo insurance may provide you with some insurance protection during and after your move. Before you look at insurance options with the moving company, it's a good idea to get an understanding of what may be covered by your personal property insurance first.
How to Get Damage Insurance When Moving
If you have home insurance or renters or condo insurance, you may already have some protection for your personal items during the move. There is a clause in your homeowner and renter policy that covers your items while in transit, or in temporary storage, however, these clauses are subject to the terms and conditions of the contract.
If you are hiring professional movers your coverage may be limited. You may be able to purchase additional endorsements from your home insurance company to cover specific risks that concern you.
How Do I Know If My Home Insurance Will Cover Me During a Move Through Home Insurance?
You should ask your home or renter insurance company about what they will cover during a move from one location to the other. They will advise you about what you need for your belongings. One option you can ask about is a Trip Transit Policy.
What Is a Trip Transit Policy or Endorsement?
The Trip Transit policy insures your property for damage during a specific trip or transit event. In this case, the trip transit policy would be covering you for your specific move.
It can cover you in the same way that your home insurance would cover your personal items, but would not necessarily cover damage caused by the movers themselves.
Ask for all the details of this coverage since it may vary from insurer to insurer. For example, trip transit would not normally cover breakage but may cover mysterious disappearance.
I'm Buying My First Home, Will My Renters Insurance Cover My Items While I Move?
Even if you are a first-time homeowner, if you have insurance as a renter where you are currently living, then you may benefit from the clause that covers your items for basic perils while in transit if you are sticking with the same insurance company.
The rule of thumb is that insurance companies understand people will move from time to time, and they are willing to provide you with continuous coverage (subject to conditions) if you stay insured with them when you go to your new place. Make sure and ask about the coverage and limitations since this is different from company to company. The list of questions in number 2 below can help you.
Will My New Homeowner Policy Cover Me for the Move to the New Home?
Don't count on your new homeowner policy insuring your personal belongings before you get to your new home. A new homeowner policy would normally only cover you for your things once they are in the new home, therefore you should not rely on a new homeowner policy to cover your items until they have reached your home. This leaves you open to a potential gap in coverage before you move in.
The only way around that is to obtain insurance where you live now so that when you move, you can benefit from some insurance coverage during the move. You can speak to your home insurance representative about this option and see what is available by asking the questions in the list below.
Moving Out From Your Parents House to a New Home or Apartment
If you are living with your parents and buying a new home or even renting an apartment, it is worth a try to speak to your parent's insurance representative and see if as a person who has been insured under your parents policy as a family member, they would be willing to consider covering you while you move from their home to your new home if you take the new insurance with them. Your agent may contact the underwriters at the insurance company and they may surprise you with a favorable response. It is worth a try.
What If You Don't Have Professional Movers and Someone Damages Property?
If you are just moving with friends and not "hiring" them for the move if they damage your property while moving you may have some recourse against them through their personal liability insurance or they may be able to compensate you for damages under the voluntary property damage clause of their home or tenant policy.
Most people do not like the idea of holding friends financially responsible for damages while they were volunteering to help, but it may be an option if something really valuable gets damaged.
Important: Insurance policies may limit coverage to people while they are employed or hired to do a job, so if you expect your semi-professional movers, or paid help to be able to cover damages through personal insurance, then you will likely be out of luck.
What If You Are Setting Up Your Home After the Move and Cause Damage to Your Own Property?
If you have a named perils policy it is unlikely you will be able to make a claim with your own insurance. If you have an open perils policy or all risks coverage, you may be able to claim if you yourself do something silly like drop your TV down your stairs, or accidentally spill your paint all over your new furniture while you are painting. Again, this is only if you do this yourself by accident, and you have an all-risk policy that does not exclude the situation you want to make a claim for.
What You Need to Ask Your Home Insurance About Coverage During a Move
Checklist of What to Ask Your Home Insurance to Find Out If You Are Covered During a Move
- What kind of coverage does my policy provide while I move from my old home to my new home? How long is the coverage good for? What if I move over several days, how long will items be covered at both locations?
- Is my home or renter insurance coverage limited while my items are in transit? (Often the coverage is offered on an actual cash value basis — depreciated value) This is important to know because actual cash value is not enough to replace damaged or lost items and different insurance policies may offer you more extensive coverage. Opening up this conversation will help you evaluate if you have the best insurance for your needs.
- Are my jewelry, wines or fine arts covered during a move? What kind of coverage is included? Some items have special limits of how much will be paid in a claim. If you do not have coverage included you may be able to buy a special floater or rider to cover these items specifically, some policies may even include breakage. Be sure to find out what coverage is available to you, sometimes it is worth adding a rider to ensure your peace of mind. If your insurer does not offer coverage, there are specialty high-value home insurers some examples include: ACE/Chubb Insurance or AXA Fine Arts, that may be able to offer you coverage for your lifestyle even after your move.
- Is mysterious disappearance or theft covered during my move?
- Are items in storage covered, and for how long? This is a really important question, do not assume you have coverage because coverage is based on the circumstances, and it should always be clearly laid out and discussed to make sure you don't have a problem in a claim.
- Is breakage covered? (The answer to this question is usually no, but ask the question anyway, it may open up potential options).
- If there is a claim, will the items be paid on an Actual Cash Value (depreciated value) or a Replacement Cost basis? Are there any options to improve coverage so you can get replacement cost?
- Will my insurance price go up if I make a claim? The answer to this question may vary depending on if you use a rider, transit insurance, or your renter, home or tenant policy. Be sure and ask.
- What deductible will I have to pay if I make a claim? Can you choose a higher deductible to save money?
Should You Buy Insurance From a Moving Company? What Are the Options?
If you are using a moving company you may have the option to purchase different levels of moving protection. It is important to understand that what they are offering is not technically considered "insurance" under state insurance laws, but these are protections that you can look into:
Two Kinds of Protection Movers May Offer You for Your Move
- Full Value Protection Insurance may include coverage for repair or replacement
- Released Value Protection may be offered at no additional charge but would only include actual cash value coverage based on price per pound. According to the Insurance Institute, this would be a rate of 60 cents per pound, meaning that if you lost a 10-pound stereo you would only get $6 of compensation. You can see how this may not really be the kind of coverage you are looking for.
Purchasing a Liability Policy From Your Mover
If you are concerned about the 60 cents per pound limit, the moving company may offer you the option to supplement the "included" Released Value Protection with a liability policy at an additional fee. If you purchase this option you may then have the option to set a limit of insurance for the value of your items. In this case, you should ask for a copy of the liability policy you have purchased and check the details to make sure what you are buying is what you need.
What to Ask Your Mover About the Coverage They Offer
- Ask for a full review of all the different insurance options they can provide you.
- Ask how the value of damaged items determined. Insurance uses different concepts to compensate you than moving companies do based on the Released value example above, you can see how important it is to understand what the mover is really offering. Get these details in writing.
- Check the moving contract for the estimated value of your things and make sure it is in line with what you estimate based on your own home inventory. If you do not have a home inventory, this is an ideal time to make one, as you pack your things. You will need this if you have to make a claim.
- Ask if the coverage they offer is different if they pack your things or you do.
- Ask them what the claims process would be if you had to make a claim. Sometimes after a big move, people might take months to unpack all the boxes or get themselves organized. Ask if there is a time limit.
- Find out if they include coverage if they damage property in your old home or new home. Things get banged up during a move, movers often have to take apart doorways or move windows, ask what happens if they damage your old or new location during these activities. You may be responsible if you cause damages at your old home, so it is good to know if you will be able to hold them responsible and what their policy is on this kind of damage.
- What deductible will I have to pay if I make a claim? Can I take a higher deductible to save money?
What If Your Mover Has No Insurance to Offer You
If your mover does not offer coverage for damage because they are a very small semi-professional type of "mover" ask them if they have a commercial liability policy.
If they do, you could always try and hold them liable under their commercial liability policy. Even though there is no guarantee this will pay off, It is worth asking about.
If your mover has no liability whatsoever, then talk to your home insurer about the coverage they think you should have to protect yourself.
They will be able to guide you about risks and limitations and give you good advice on what you can do to protect yourself.
Advantages of Claiming Losses Under a Moving Insurance Policy or Transit Policy vs. Your Home Insurance
One last tip for you to think about when you insure your move: If you make a claim on your home insurance your premiums could go up a lot, in some cases 40 percent. If you are already paying high premiums because it is your first insurance, you would really want to think twice about starting an insurance policy with a claim. Having a separate insurance policy cover your move could protect you from the loss of a claims-free discount and an insurance rate hike on your renewal.