People tend to regard insurance as the definition of a grudge purchase. On the other hand, it’s also widely recognized as something you should rather have and not need, than the other way around. Consumers have resigned themselves to taking out life insurance, household insurance or car insurance, but when it comes to covering something short-term, like moving their house or office, they often question whether they need it and consider just taking their chances. This seems a risky thing to do when the entire content of your office or home is at stake. Even the best, most professional movers in the world could encounter an accident while carrying your belongings. Long-distance moving companies also have to bear some liability for the loads they carry. For this reason, your cover for your load could come from a combination of third-party insurance and carrier liability. Highland Moving Systems explains the difference between the two and how they interact. The benefits of covering the replacement value of your belongings should become clear.
Moving insurance works in pretty much the same way as any other insurance policy, such as car or household insurance. Your policy offers protection for any of your belongings that might get damaged during the move. The exact details would depend on your policy, but moving insurance plans can cover anything from cover for fires, floods and road accidents to moving staff accidentally dropping fragile valuables in transit. If you are not covered for these eventualities, then you will have little or no recourse should there be an unfortunate accident on the road. That is, except for the liability carried by the moving company, to which we will get later.
Take a look at your current household contents insurance policy and check with your broker. You may find that moving is covered by the policy, which means your insurer will help you recover certain costs if anything is lost, broken or stolen during the move. While insurance providers are not mandated to offer this cover, they often do anyway. Just check to be sure. If they don’t, you will probably be able to purchase some kind of extended cover to give you peace of mind during the move. As an aside, remember that some of the terms of your household insurance policies may change if you are moving between provinces. In fact, your current insurer may not cover you at all after you’ve crossed the provincial border. Most good insurers will work nationally and not be confined to just one province. Again, you should check to be sure. Even if your provider can continue to cover you after the move, some of the terms of the policy may change once your new address becomes the insured site. If you are moving across national borders, then you are likely to need an entirely new policy. You will have to ensure that you have arranged cover to take effect once you arrive at the new location and you will also need to make sure that you are covered for the move itself. This can always be arranged, either with an insurance company or with your moving company.
While formal insurance policies held with licensed providers are always a safe way to go, you should remember that your mover also carries some liability for your shipment. This leads us to the concept of valuation. Valuation is often confused with insurance, but the two are very distinct from one another. Valuation refers to the fact that the mover is liable, to an extent, for any of your items that may be broken or lost during the move. However, valuation does not offer you the same cover as a third-party insurance policy, as we will explain.
Moving companies do not operate under conditions of unlimited liability – in truth no business does. Unlimited liability is the stipulation that, as a carrier, you are 100% liable for any damages to goods you might be carrying. While good movers are always willing to accept their responsibilities as reputable carriers, unlimited liability would swiftly become an untenable business model. So, the federal government has put legislation in place to limit the liability that moving companies hold when carrying their clients’ goods. This is where the terms of the Transport Act come in.
In terms of this law, the government has set a maximum limit on what these companies can be expected to pay in the event of a loss. The limit is $0,60 per pound per article. The Act does allow shippers who do not have third-party insurance policies to negotiate different terms with the moving company. Movers are legally required to offer their clients the opportunity to raise the limit of liability, and they can adjust their prices accordingly. This means that, if a client believes that the $0,60 limit is insufficient, they can request that the limit be increased. They can then declare a value for the shipment and ask that the declared amount be covered in the event of an incident. The mover can then agree to be liable for that amount and, thus, charge more for the move. Or, they can decline to undertake the shipment at all.
The cover offered by movers is based on the replacement value of the goods. Across the industry, terms of the Transport Act notwithstanding, movers accept $10,00 per pound per item is a reasonable replacement cost. So if a total load weighs 10,000 lbs, then it will have a declared value of $100,000. This means that the mover’s liability is limited to $100,000 in the event of a total loss. Bearing in mind that it is very unlikely that your entire load will be lost if something untoward happens, this is usually more than enough. While this is the industry standard, some shipments can be valued for less and some for more, depending on the customer’s preferences and budget.
Option 1: Released Rate Liability This is the basic, legally mandated coverage, provided at no extra charge. This follows the $0,60 limit mandated by the Transport Act. You can take this option if you already have a third-party insurance policy to cover your belongings.
Option 2: Replacement Value Protection This is the $10,00 per pound per item option discussed above. It is usually adequate to repair or replace any damaged items. This is probably your best option to protect your belongings, and wouldn’t require additional cover from an insurance provider unless you feel you need the extra protection.
Option 3: Items of Extraordinary Value You may have items that you know exceed the $10,00 per pound limit. In this case, you need to present a written appraisal confirming the replacement value.
The Released Rate Liability Option is the standard one, which all movers are required by law to provide. In the event of an accident, theft or other loss, this option will likely not cover the full value of your load. So, if you want to take this option, you should have an insurance policy in place that will cover the costs. This might be your household insurance or perhaps you can pick up a different third-party policy to cover the move. That depends on you.
The Replacement Value Protection option is, as we said already, the best one. The $10,00 per pound limit is usually enough to cover the cost and you probably won’t need a third-party insurance policy.
If you do have items of extraordinary value, you must declare them and arrange for special cover. The charge for moving those items will be higher, but you will certainly find this worthwhile in the event of an accident.
Moving is stressful enough as it is, and you need to reduce your worries as best you can. Making sure that you have sufficient coverage to protect you financially in the event of any losses, is one way to give you peace of mind during the unavoidable upheaval of moving. For this reason, we strongly advise you either to get insurance for the move, or to extend your current policy or to take the Replacement Value Protection offered by your mover. Remember that statistically, your belongings are far more likely to arrive safely at their destination than to be lost in any way. So, it’s best to relax in the knowledge that the best-case scenario is the most probable, prepare for the worst just in case, trust your movers and relax as best you can.
Founded in 1948, Highland Moving Systems has successfully moved thousands of loads across provincial and international borders. We are dedicated to providing the highest level of moving services in Toronto, Pickering, Ajax, Whitby, Oshawa and around the world. Whether you're moving across Canada, right next door or overseas, we have a team of full-time international packers and movers, loaders, drivers, warehousing personnel and customer service staff ready to make your move stress-free. The longevity of our company is what sets us apart. Because we put people first, treat our customers as individuals and provide professional, focused services you can depend on for all your moving and storage needs. We can be trusted to move your home or office contents safely and to provide the replacement value protection you need to help you move in peace. If you are looking for a reputable, reliable long-distance moving company in Ontario, look no further.