Average Cost of Moving Insurance

While items becoming damaged is often the last thing on people’s minds when it comes to moving, it is the first thing to completely ruin a moving experience. Unfortunately, both homeowners' and renter’s insurance policies usually do not cover items that are damaged during relocation.

The valuation options offered by your moving company, particularly full-value protection, are an excellent choice. Though, if your home has items that are irreplaceable, of high-value, or you’re especially concerned about possible weather-related damage to your possessions – you may want to consider third-party moving insurance.

Continue reading to learn more about valuation, moving insurance, and why covering your items during a move will save you the extra money, stress, and defeat that comes with having to replace your broken, damaged or lost belongings.

What is Moving Insurance?

No matter how careful people – and in this case movers – are, moving accidents can happen to anyone. Just like you wouldn’t want to drive a car without auto insurance, it’s highly recommended that you don’t move without considering moving insurance.

The purpose of moving insurance is to pay for repairs or replace items that get damaged during transport by a moving company. The specific details of your moving insurance and what it covers will depend on the policy, but it can range from floods and fires to your movers accidentally dropping your TV.

Technically speaking, moving companies are not licensed to sell insurance. Instead, they offer protection for your belongings called valuations, which are required by federal law and regulated by the U.S. Department of Transportation. Though, you also have the option to purchase moving insurance from a third-party provider to cover items that your moving company doesn’t.

What is Valuation?

Moving insurance is always offered by a third-party company, and protects against damage or loss of your belongings during a move. Valuation, on the other hand, refers to the amount of liability your moving company takes if your goods are damaged during the transportation process.

Generally speaking, the coverage your receive under valuation is more limited compared to insurance. It typically only indicates how much the company is going to reimburse you for a damaged item. The types of valuation will vary from moving company to moving company, though the most common forms of valuation are: released value protection and full-value protection (FVP).

Note: In some cases, “valuation” refers to the value that you place on your items. This term may come up if your movers ask you to approximate the value of your shipment, as they use this to calculate how much their full-value protection option costs.

Types of Moving Insurance

As previously mentioned, moving insurance is typically available in three different types: released value protection, full-value protection, and third-party insurance. Let’s take a look at each of these in detail so that you can better understand your options.

Released value protection

Also commonly referred to as basic coverage, released value protection gives you the bare minimum in terms of coverage. It is included whether you move is interstate, intrastate, local, or long-distance. In other words, released value protection is offered by your moving company for free; all you have to do is ask for this coverage and then sign a contract to initiate it.

However, since it’s considered basic coverage, this type of insurance is not very extensive. For intrastate relocations, this protection only covers 30 cents per pound per item, and for interstate relocations, it compensates you 60 cents for each pound per item damaged. For example, if your 100-pound couch got damaged during the move, you’ll only receive $60 to cover the damage.

While your belongings won’t be covered as high as their market value, released value protection is still nice because it’s always incorporated into the cost of your move. Though, if you are concerned about your items getting damaged while in transit, you should consider opting for a more comprehensive form of protection.

Full-value protection (FVP)

Full-value protection is the upgraded form of valuation, which is an additional charge but provides more extensive coverage than released value protection. With full-value protection, your moving company is liable for the current market value of your goods and must provide one of three solutions for items that get broken while in transit:

1. Repair the damage to the item.
2. Replace the item with something similar.
3. Issue a cash payout that is equal to the current market value of the item.

When you choose full-value protection, you must calculate the value of your belongings and your company will use this number to determine the compensation limit. The drawback to this valuation is that it does not cover items of high value and typically will not cover any items that are worth more than $100 a pound.

Third-party moving insurance

Since moving companies cannot sell insurance themselves, third-party providers handle moving insurance for moving companies. As your move already comes with released-value protection, supplementing with third-party moving insurance is an excellent idea. The basic coverage covers up to $0.60 per pound and the third-party option will help make up the additional $0.40, allowing you to enjoy full coverage.

Note: Before you choose third-party insurance to make up for what your moving company doesn’t cover, make sure that you check with your homeowner’s or renter’s insurance policy first. While uncommon, it’s not impossible that your policy may already cover you. It doesn’t hurt to check!

What is the Average Cost of Moving Insurance?

Since your regular renter’s or homeowner’s insurance usually doesn’t protect your belongings from damage during a move, the moving insurance that you purchase must be calculated separately.

The cost of moving insurance depends on which option you choose, whether it’s released value, full-value, or you opt to purchase coverage from a third-party company. It also depends on the value of your belongings. Again, only third-party liability protection is considered a type of moving insurance.

As displayed above, released value protection is provided for free from your moving company and full value protection is an upgrade that typically costs between 1% and 2% of your property’s total value. On the other hand, third-party moving insurance usually costs roughly $1.25 a pound, but costs can vary based on the company you work with.

Full Value vs. Third Party Moving Insurance

If you’re unsure whether you should upgrade to full-value protection or seek out additional coverage from a third-party provider, consider the total value and weight of your items. For example, if your items weigh a total of 2,000 pounds and are valued at around $50,000, you can expect to pay $750 for full value protection and third-party will cost you around $2,500.

Regardless of the price, if the goal is to obtain 100% coverage for your items, the only option is to obtain additional insurance from a third-party provider.

Do I Need Moving Insurance?

While moving insurance is not required by law or by your moving company, it is highly advised that you have enough coverage to ensure that you are protected if your items get damaged during the move. For replaceable or inexpensive items, the free, basic coverage that is offered by any DOT-certified moving company may be enough. Though, if you have belongings that are particularly expensive or rare, you should consider a more comprehensive coverage plan from a third-party insurance company.

Have more questions about moving insurance and the average cost of each option? We can help! Reach out to one of our moving experts today at (888) 202-0036.

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