Protect Your Move: Understanding Moving Insurance vs. Full Value Protection

Did you know that marine insurance got its start in a coffee shop?

Lloyd’s coffee shop in 18th-century London had long been a place favored by customers who worked in ocean shipping. With the expansion of global trade, it only made sense that someone would come up with the idea of insuring the booming industry. The first premium payment was recorded in 1757 at two guineas.¹

Many of the investors made a fortune in the business. In fact, Lloyd’s of London still exists as a specialty insurance company today. However, many people lost their entire fortunes insuring shipments by sea. Storms, navigation difficulties, pirates, disputes between countries—all of these and more made the sea trade a very volatile business to be in.

Fast forward to today: These days, when a ship leaves California for Hawaii, we expect it to arrive safely—and we expect it on time!

Although many of the problems of the 18th century have been all but eliminated, shipping your goods via boat across the Pacific still involves a few risks. For example:

 

The average wave height in the Pacific Ocean can reach as much as 9 feet. That’s as high as the first story of a house! No matter how well your container is packed, the laws of physics dictate that its contents are going to shift in high seas.

Container ships are also subject to something called “parametric rolling,” which is a specific kind of pitch-and-roll movement that can put significant strain on containers, especially their tie-downs. If your container breaks free and starts banging around on 9-foot seas (or more!), you can imagine it might cause some damage to its contents.

There’s a human factor involved. Your container will be loaded and off-loaded onto a ship by a crane operated by a human being. It will be secured on the ship by another human being. We all know that human beings make mistakes every now and then. Maybe your container gets dropped hard into place. Maybe it’s not secured correctly. When it comes to loading and offloading, the trained professionals involved will give their all, but mistakes do happen.

Although “lost at sea” sounds like a concept straight out of the 18th century, it does happen to containers. This is obviously a worst-case scenario, and it’s not likely. However, it is possible. Of the 130 million freight containers shipped last year, an estimated 10,000 were lost overboard.² (That’s 0.008%!)

Given All This Risk, What Can You Do to Protect Your Move?

The good news is that you don’t have to book yourself a flight to London, head to Lloyd’s coffee shop and try to convince a crowd of grizzled shipping veterans to give you moving insurance.

Instead, we’ll share three insights to help you protect your move—and your possessions as they travel all the way to your new home:

1. Consider Full-Value Protection

A lot of people search for “moving insurance” when they’re looking for options to protect their move. Every industry has its own jargon, and movers are no different. Most often, you’ll find an option called full-value protection.

Moving companies don’t call it “insurance” because they’re not licensed as insurance providers. However, full-value protection provides coverage that’s very similar to what most people think of as moving insurance:

In the event that something happens to your possessions during transit, full-value protection covers your items for the cost of full replacement or repair.

You’ll have the option to add this coverage on top of your moving quote with any reputable company.

How Does Full-Value Coverage Work?

Let’s say you decide to ship that amazing sectional couch you got from Pottery Barn last year. It was a little pricey at $4,900, but you figured you’d have it for years. So it’s definitely going with you to Hawaii.

However, at some point along the journey, the contents of your container shifted and the couch arrives with a huge rip in its fabric.

If you purchased full-value protection and properly accounted for your couch within the inventory sheet, the moving company will pay to repair or replace your couch.

How Much Does It Cost?

The cost of full-value protection is based on the value of your shipment. You can get a quote for this coverage when you get a quote for your move.

You should also know that full-value protection isn’t your only option to protect your move. That’s why we also recommend that you . . .

2. Understand All Your Options

When it comes to deciding how to protect your move, educating yourself is your best asset.

Each company is a little bit different, but they’re all required to offer one other type of coverage in addition to full-value protection. It’s called released value protection.

Under this option, your moving company is required to reimburse you at up to $0.60 per pound per article for anything that gets damaged or lost.

Most of the time, this coverage is included with your move. Sounds like a great bargain, right?

Let’s review a potential scenario for a covered loss:

Despite your moving company’s best efforts, your $4,990 sectional couch from Pottery Barn arrives damaged and essentially ruined.

Full-Value Protection

Released Value Protection

The moving company pays you:

$4,990

The moving company pays you:

149lbs x $0.60 = $89.40

Your replacement cost: $0

Your replacement cost: $4900.60

From the example, you can clearly see the extra layer of security that full-value protection provides. If anything happens to one of the items in your inventory, the moving company will pay to make it right.

So in addition to the coverage you get when you invest in full-value protection, you’ll also secure the peace of mind from knowing you’re covered just in case anything happens during your move.

Now, at this point, you might also be wondering if you might already have this coverage under your current insurance plan.

That’s why we always recommend that you . . .

3. Talk to Your Insurance Agent

When we explain full-value protection to our customers, the most common question we hear is:

“But won’t my homeowner’s insurance policy cover me?”

The answer is: It depends on your policy.

Your best bet is to call your insurance agent before you make a coverage choice so you know exactly what you’re covered for—and what you’re not.

If you open up your container and find a few damaged items, that’s a terrible time to discover that you’re uninsured or not insured at all.

A Protected Move Is a Happy Move

If you’re one of the thousands of people Googling “moving insurance,” the concept of protecting your move is clearly on your mind.

The right moving company will do everything they can to get your possessions to your new home in perfect condition. And the right coverage will ensure that you’re protected, just in case something happens.

To discuss what kind of coverage is right for you, talk to one of our Certified Moving Consultants. They can help you prepare for every angle of your move so there are no surprises, just delight in your new home.

Sources
1. https://www.lloyds.com/about-lloyds/history/corporate-history
2. https://www.logisticsmgmt.com/article/cargo_insurance_protecting_against_risk