One of the most misunderstood aspects of hiring a moving company is liability coverage. Many consumers assume that if a mover breaks an item, the mover will buy them a brand new one. Unfortunately, standard moving contracts do not work this way.
Released Value Protection (Basic Coverage)
By federal law, interstate movers must offer basic liability coverage at no additional cost. However, this coverage is minimal. It is known as "Released Value Protection," and it compensates you at a rate of 60 cents per pound per article.
What does this mean in practice? If a mover drops your 50-pound flat-screen TV (worth $1,000), the mover is only legally obligated to pay you $30 (50 lbs x $0.60). For most people, this is unacceptable.
Full Value Protection
If you want comprehensive coverage, you must purchase Full Value Protection (FVP) from your mover. Under FVP, if an item is lost or damaged, the mover has three options:
- Repair the item.
- Replace the item with an item of similar kind and quality.
- Offer a cash settlement for the current market replacement value of the item.
FVP costs extra, and the premium is based on the total declared value of your shipment. It also often includes a deductible.
High-Value Inventory
It is crucial to note that under FVP, items of extraordinary value (defined as items worth more than $100 per pound, such as jewelry, antiques, or high-end electronics) are not covered unless you explicitly list them on a High-Value Inventory form before the move begins.
Always read the fine print and understand your coverage before the truck leaves your driveway.