Valuation Coverage vs. Marine Insurance

You should be able to trust that your moving company will protect your valuables as well as you would. A reputable moving company will respect your belongings and carry them with confidence and care. I am sure this is one factor you considered when choosing your moving company. Unfortunately, mistakes may be made, and accidents will happen. Even the most experienced movers from the best moving companies have accidents with valuables from time to time.

First things first - before you hire a moving company, it is vital that you make sure it is licensed and insured. All reputable international shipping companies are licensed by the Federal Maritime Commission (FMC) and should have an FMC number. You can request this number and verify it on the FMC's official government website. Most international shipping companies display their FMC number on their website as well.

Now that you've planned your move and chosen your moving company, you still need to consider how to safeguard your belongings. You may ask:

Are my items covered for any damages or loss?

Valuation coverage vs insurance - what is the difference and how do I choose?

This is the part when most people get confused. Learning about insurance and liability may not be very exciting, but it is important. There are different types of coverage, but the main difference is the amount of compensation you will receive for your belongings. Continue reading for an explanation of their differences.

What is valuation coverage?

You may hear most movers refer to valuation coverage as insurance. This is not the same thing. Valuation coverage is a moving company's basic minimum liability that covers part of lost or damaged items. With this coverage, your belongings are only covered at 60 cents per pound (as required by the Department of Transportation). At first, this doesn't sound all that bad, right? BUT you need to consider that valuation coverage does not take the item's actual value into account.

For example, if you have a 10 lb. flat screen TV, your coverage will only calculate to $6.00. This should make you cringe a little when you think about what you paid for it.

This is the basic coverage that is included with your move. So, before you just agree to it because you don't want to spend more money or talk about insurance, you should think about how much money you will be out if there is an accident with any of your belongings or the entire shipment.

What is Extended Marine Insurance?

If you are like most, you are moving on a budget. So, the last thing you want is to pay more for coverage. However, if you need it, you will be extremely grateful you splurged. Full value protection means the insurance company reimburses you for items damaged, destroyed, or lost, depending on the type of coverage chosen.

There are two types of extended marine insurance policies.

1. All Risk Insurance

   Covers for damages and loss on the following terms.

   • Loss - covers any item on the inventory list, that is lost during the move, regardless if it was packed by a professional moving company or the client.
   • Damage - covers any damaged items packed by professional moving company only. Any damaged items packed by the client will not be covered.

     Why? Because moving company's do not know the condition of your item pre-packed, nor how it was packed. Moving crews are trained in packing and know the correct material and box to use for each item. Having your items packed by a professional moving company helps ensure that your items are packed well and are secure during your move, which is why only items packed by professional moving companies are covered.

2. Total Loss Insurance

   Covers for catastrophic events only, when the entire shipment is lost, i.e if the vessel sank, container was dropped by operator and entire shipment is destroyed.

Valuation Coverage vs. Extended Marine Insurance

Many people think that movers will automatically compensate for the damage to their belongings, but it is all based on the type of coverage you have chosen. There is also a question of liability. If you choose valuation coverage, a moving company has legal liability. This means they will reimburse you in the case of negligence on their behalf. When you take the extended insurance policy, your belongings are covered by the insurance company, and not the movers. So, if you are moving with more valuable goods, you should consider insurance.

It is important to note that you can choose either of the insurance policies or the valuation coverage, but not both. If you have any questions, please reach out to your moving coordinator, and they will be able to help explain the policies and help you choose what best fits your needs.

How is Valuation calculated?

Valuation is calculated (depending on the state/federal jurisdiction) based on the value of the entire shipment as set by you, the customer. Our valuation is based on your declared value of your belongings and covers your entire shipment. The declared value is typically the value of your item currently, not in brand new or store-bought condition. The value is best described as garage-sale value.

For example, if your dining set was purchased for $1,000.00, but you would only be able to sell it for $500.00 at a garage sale, then the value is $500.00.

Additionally, any items that are high-valued, meaning worth over $1,000.00 USD should be listed separately and given to your chosen moving company. China, antiques, and fine art are all prime examples. If they are not listed separately or you haven't advised your movers of them or the value, they may not be covered by the insurance policy taken. We always suggest listing your high-value items to ensure that they're covered.

What happens if you need to file a claim?

Our movers are encouraged to document any damage incurred, so that we can immediately begin working on finding a solution. If you discover any damage or missing items, we encourage you to reach out to your moving coordinator as early as possible. They may ask for photos and valuations declared so they can take action upon receiving the necessary information. Also, it is best to have your receipts available in the event they are requested as well.

It should also be noted that an insurance company may deny a claim if it is found that you had them transport dangerous or prohibited items. This includes items that are corrosive, explosive, or flammable, such as loaded weapons, pesticides and fertilizers, gasoline and motor oil, paint, lighter fluid, acids, and chemicals. Always make sure you recycle or dispose of these items before a move. If you are not sure how to dispose of certain items, contact the Environmental Protection Agency.