Scott Luther

I will preface this portion of this topic like I have the others...movers don't sell insurance. Only insurance companies sell insurance. Movers sell "valuation".

The only other type of coverage you can get from a mover is "full replacement coverage" or "full value protection". Some companies call them slightly different things but they are the same animal. Basically what you are doing with this is you are buying a value ceiling or a value umbrella over your entire goods. Some movers make you buy a minimum of $6.00/lb. That is not per article. That refers to the minimum you could purchase over your entire shipment. For example, if your entire shipment weighs 10,000 lbs, you would have to be covered to $60,000 of coverage. In other words your claim could not exceed $60,000. If the mover dropped a TV, it would be irrelevant how much it weighed (for the most part, I'll get more into this later). As long as the TV doesn't cost more than $60,000 to repair, replace or reimburse you for it, you would be covered to that amount for that item or any 10 or 100 items that got damaged. Again, your claim can't exceed the amount of $60,000. That also means that if your truck got totaled on the highway and there was total loss to your shipment, you would receive a check for $60,000. Most movers offer deductible options for this type of coverage to make it more cost effective if that is what you are looking for. Obviously deductibles work exactly the way you know they do. If you have a $500 deductible, the first $500 is coming out of your pocket. Choose wisely.

The one caveat to full replacement is the most any mover will pay you for any one item is $100/lb per article. In most cases, that is more than enough coverage. The TV that got dropped...if it weighed 100 lbs, the maximum claim the mover would repair, replace or reimburse would be (100 x 100) $10,000. Obviously any TV could be replaced for less than that. Therefore it wouldn't be recognized as a "high value" item. Any item worth more than $100/lb per article is considered "high value" and must be put on a "high value inventory" list. Any mover who offers full replacement coverage has to give you a "high value inventory" form prior to loading. Any item you put on this list, you are filing as an exception to the $100/lb per article rule. For example a Hummel figurine could only weigh ½ pound but could be worth well more than $100. Theoretically anything on the HV list could be worth the maximum amount of your valuation, for example $60,000. Just in case you're moving the "Mona Lisa" or something like that. You don't need appraisals to put anything on the HV list so when in doubt, put it on the list. It is a moot point if it doesn't get damaged.

To summarize, I wouldn't begin to tell anyone what type of coverage they should get. It is different for everyone. It all depends on your tolerance for risk. If someone is just starting out and they have a lot of hand-me-down furniture, maybe they prefer to save as much money as possible on the move and go with .60/lb. If you are a family of five moving after 20 years of marriage and you have amassed a lifetime worth of memories and niceties, you might want the full replacement coverage and any cost. Maybe you are a mature single person with an art collection, or Hummel collection that really needs that full coverage. Or maybe you are a young family with many small children and you live in the house of child-proof plastic and don't need full replacement. The point I'm trying to make is it is different for everyone. I was asked by a client once ‘are you going to break $950 dollars worth of my stuff?'. That is what the valuation would have cost him. $950! He made a valid point. No. We weren't going to have that much damage on his move. (And we didn't damage anything by the way). He said then, if I go with the .60/lb per article and you only damage $200 worth of stuff, I just saved $750. He is correct, but my answer is no one ever means to damage anything. It is always an accident. Who knows what is going to get damaged. Everyone is always careful with everything. He wanted to go with .60/lb per article because he knew we were going to be very careful and trusted us to have minimal damage. (He was a repeat customer). His wife on the other hand, insisted no matter what, she wanted full replacement on her stuff! I'm not going to tell you who won, but I can definitely see both sides. It is just your tolerance for risk.

But at least now you are all informed and can make the decisions on your own.

First of all, only insurance companies offer insurance. Movers sell "valuation".

Continuing on with yesterdays post regarding movers liability and whether or not you should purchase "extra coverage" from a mover. It is not my intent to be too wordy, but I failed. I know this is a dry subject so I tried to break it up into smaller, more digestable peices.

In the previous post I talked about the minimum liability a mover has to offer. It is .60/lb per article and I won't talk more about that here. There are two other options, but most other movers only offer one other option...full replacement coverage. First the middle option....

In some states, you might be able to buy "depreciated coverage". I would never recommend this. Typically if there is damage, you will get a depreciated amount settled to you. For example, if you had a 7 year old TV, they would calculate that TV cost X amount of dollars. Then they subtract 10% to 15% per year until you get the depreciated amount for the replacement of that TV. Most of the time, you don't get back what you paid for that valuation in the first place. A real rip-off! Most interstate movers do not offer depreciated coverage anymore.

Tomorrow I will talk about full replacement coverage that any reputable mover should offer. That by far is has the most to talk about.

Please feel free to contact me privately with any further questions.

Should I buy the extra insurance from the moving company?

For full disclosure, I work for a moving company and have for over 26 years. I am trying to be consultative. In my first installment of this series I would like to talk a little about the difference in insurance and valuation. In following installments I will break down each kind of coverage you can purchase, the exceptions to coverage and the wisdom behind buying coverage or not.

First of all, only insurance companies offer insurance. Movers sell "valuation". There is a significant difference. Insurance is"all risk" coverage most of the time. Valuation is coverage for damage due to movers' negligence while it is in the movers' possession. Talk to your insurance agent. He sells insurance and would be better to tell you what they cover. Do not assume your home-owners insurance will offer you any coverage. Most of the time, they don't. The two big exposures that HO don't cover are "due to movers' negligence" and "off-site or in-transit". I only know of two companies that offer coverage for these types of exposures so it is definitely the exception when you are covered, not the rule. Now renters' insurance is a different story. Most of the times renter's insurance offers coverage for those exposures and you are paying for it anyway. It's a no-brainer in that case. Go for the free coverage and save the money on the move...you've got coverage already. Talk to your insurance agent first to confirm any coverage!

I will preface this by saying you will always be covered for movers' negligence! If a mover is negligent with an item, they will be responsible for it. No matter what! The only question is the amount of coverage you get or the liability you are covered to. Any inter-state or intra-state mover has to supply a minimum liability of .60/lb per article. Please know that this is very minimal coverage. In fact, depending on what got damaged, this could be garbage. For example, if a mover drops a 100 lb TV and you have .60/lb per article, you will get a check for $60. They will not argue liability. Or they shouldn't anyway. You are covered, just not for much. I'm sure they will state your agreed upon coverage as if you understood it clearly prior to loading. Of course, if you hired the right mover, they would have clearly communicated this to you well in advance. I would only suggest .60/lb per article if you have some other type of insurance covering your household goods. I know someone is going to say the mover should be responsible for anything they damage. They are....to either .60/lb or full replacement. You get to pick.

The first thing you should do is ask someone you trust for a referral. If someone you trust, like a family member, or your Realtor, feels confident in their ability to refer you to a mover, they must have had a pretty good experience themselves. That is always a good place to start, but keep in mind, a mover is only as good as his last move. You still need to protect you and your family's best interest. Here are a few tips.

• Homework. Starting with a mover you were referred to, get at least two other names. Do a little background check on them first. Start with the better business bureau in your area. Do a Google search on the local agents' company name. Disregard searches with the carriers' name. Names like United, Mayflower, Allied, etc don't own any trucks and are the franchise name. It is the local company (aka agent) who you should check on. Last time I checked, not one move was performed good or bad because of the color of the truck.
• In-Home Surveys. Only use a mover that is willing to provide an in-home survey. Most good movers will provide in-home surveys, free of obligation at no charge. If you get in-home surveys, it eliminates most issues you hear regarding moving scams. If you have read my previous blog that refers to some common problems involving internet movers, you would know what I am alluding to.
• Written Estimates. Get at least three estimates! Not just any estimate either. Get your mover to provide a written, guaranteed, not-to-exceed price on the spot after the survey. Most of your reputable movers can do this rather easily.
• Standards of Performance. Find out from your potential mover what their standards of performance are and how they track them. If you get a blank stare, be afraid. You need to know what their expectations are going to be for your move so you can set yours appropriately.
• Standards of Employment. You should only use a mover that uses full-time employees. Do not settle for part-time help, day labor, or temp service help. Their men should be background-checked, and drug tested. After all, they are going to be in your home handling all of your belongings. Sooner or later, you have to hand over every thing you own to a perfect stranger. Make sure you don't settle on cheap labor.
• Guaranteed Dates. Make sure the loading date is a guaranteed pick-up date that is firm. Most times you will have a closing the very next day. Find out what their plan is if the truck scheduled to pick up your things is delayed. Make sure they guarantee the pick up. Also make certain you get a guaranteed range of days they will deliver. This is typically called a "delivery spread". Find out what their policy is if they are late...by even one day. Most good companies will give you a flat per diem.
• Additional Services. It is the law that anytime someone gives you a guaranteed price, they give you an additional services price list. This is a menu of prices for services that could potentially raise the price of your move....after the truck is loaded. If the scope of work changes after the truck is loaded, it is fair to assume the price will go up. For example, if the truck attempts to unload in an area that is inaccessible, for whatever reason, and the mover has to get another smaller truck to "shuttle" your furniture from the big truck to the smaller truck, it is reasonable to think that would cost them more money. It is the law they provide the cost for any additional service, prior to you needing it, in writing.

In this installment of "Be Careful of Internet Movers!" I want to add a couple of the more common problems of what to watch out for. Please see my first post to see the first two points. http://activerain.com/blogs/yourrelocationresource

•3. Quality of service. Most likely you are dealing with a mover, or move broker (much worse!) with very little standards of performance. Remember they are dealing with trying to make money with volume, not referrals. Their men and drivers are frequently people hired that can't get work in the industry for any where else.

•4. Service history. Another consistent problem has been a lot of these "internet movers" just stop doing business under one name, and then continue business in the same manner under an new business name. It is the easiest way for these types of businesses to operate. As soon as there is a problem with too many complaints (or with the law) it is also the cheapest way out for them.

On my next installment, I will talk about how to avoid these major concerns.