Sunday, March 14, 2010

Insurance Claim Settlement

One of the few unknowns during the relocation process is the insurance process or the valuation process when you actually have a claim for damage or loss during your household goods move. There are two different types of moves that have uniquely different coverages. The two types are the domestic move and the international move.

Looking at Domestic Moves, most movers probably 99% offer valuation protection. What is valuation? How does it differ from insurance? Valuation is like insurance however is a coverage that is provided by the moving company, trucking company or the like. It is not called insurance because it is a coverage that is handled by the moving company directly out of their general business expense. In cases where the claim is higher than the movers corporate insurance policy, the movers will turn the claim over to an insurance company to provide the claim adjustment or the settlement. However, it is still settled in line with the terms of the valuation coverage.

The minimal coverage that all moving companies provide when transporting household goods across state lines is $0.60 per lb per article. At $0.60 per lb per article a 200 lb dresser would have roughly $120.00 of coveage. $120.00 of coverage is enough to repair a minor nick or scratch, but is not enough if something gets totally destroyed. Let's take a look at a mirror or picture. If the movers pack up a mirror or a picture and it is estimated to weigh 20 lbs, the coverage would only be about $12.00. Most mirrors and pictures are going to cost more than $12.00 and most damage to a mirror or picture is going to be a total loss. Therefore, at $0.60 per lb, minimal coverage, there will not be enough coverage to compensate you for the damage or loss of the picture or mirror.

Let's look at the next level of coverage. Depending on which moving company you are talking to they all offer some variation of Full Replacement Value protection. This type of protection provides a higher value of protection per piece. The 200 lb dresser with a replacement cost of $1000.00 would have protection up to $1000.00. The 20 lb mirror with a replacement cost of $250.00 would have protection up to $250.00. This type of valuation coverage has an added cost and can also have deductible options.

What happens if there is a claim and you have Full Replacement Value protection? Most companies don't explain this thoroughly and it is good to know prior to making a move. If you have damage, the moving company has the right to repair or replace the items prior to making a cash settlement and salvaging the piece. Most moving claims are not catastrophic, yet some moving claims are for household goods that are precious to an individual or hold a higher intrinsic value because they are family heirlooms. Ussually, almost always, when there is damage to a family heirloom, there is never enough anyone can do to make the owner happy. However, the moving company will hire a professional to complete the repair or make retribution via cash to compensate you for the real value of the loss... Replacement Value.

If you ever have any questions about the claims process or how to make sure you are protected, please don't hesitate to call or email... 877-396-0132 - andy@relocationbenefits.com

Our next blog will be discussing International Insurance Coverage.