Monday, April 4, 2011

Valuation Coverage on Intrastate North Carolina Moves

Understanding valuation coverage when moving is one of the most important challenges facing many clients.  Valuation coverage though similar, is not identical on intra and interstate moves. Here we will be referring to local or long distance intrastate moving in North Carolina.

The first thing a client should know is that valuation coverage technically is not the same as insurance, though many refer to it as such. Only licensed insurance companies or brokers are permitted to sell insurance, and for this reason, any damage protection against property being moved by a moving company will be referred to as valuation coverage. This coverage is generally backed by the moving company's cargo and liability insurance coverage, should a serious claim be rendered.

Valuation coverage is very often misunderstood by moving company clients for many reasons. Some mistakenly assume that since a moving company is moving the property, they should be fully responsible for what happens to it during the relocation. Unfortunately, this is not the case and they often do not truly learn about valuation coverage until they put forth a claim and expect full reimbursement for a damaged article, even though they chose not to purchase any coverage beyond basic value protection.

From an economic standpoint let's ask the following:  Should a moving company cover all property moved with full value protection for free, that would mean that any damage caused during the move -- for any reason -- would mean a pay out either by the moving company or its insurance company?  This would incur additional expense to the moving company and would result in higher prices for everybody, across the board. So for those clients who do not need more coverage, for a variety of reasons, the price of their move would still be higher. This would put a burden on those shippers needing a low cost move.

Valuation options give the consumer a better way to control the cost of their move. If they need additional coverage, it is an available option. In other words, basic value protection allows the shipper to accept a lesser level of coverage in return for a reduced price on the move.

Valuation coverage for residential moving in North Carolina is regulated by the NC Utilities Commission, as are all residential moves in transit in moving company operated trucks across state highways. This means that all legal moving companies operating in NC are required to offer the same three types of coverage. These are basic value protection, which is included in the cost of the move -- and also depreciated value protection and full value protection -- which are both fee based coverage.

With basic value protection, should an item that is being moved be damaged or destroyed, the weight of that article is determined and that weight is multiplied by 60¢ for a total claim value. This coverage is based solely and the weight of the article, and not on its value. If a repair to the damaged item should cost less than the total claim value, the moving company is only liable for the lesser amount.

With depreciated value protection, should an item that is being moved be damaged or destroyed, the price and age of that article would be determined, and the moving company would be responsible for the depreciated value of the claim. If a repair to the damaged item should cost less than the total claim value, the moving company is only liable for the lesser amount.

And with full value protection, or replacement valuation, should an item being moved be damaged or destroyed, the price of that article would be determined and the moving company would be responsible for replacement, whether it be a cash payout or actual replacement article. If a repair to the damaged item should cost less than the total claim value, the moving company is only liable for the lesser amount.

Notice that in all three coverages, it is always the carrier’s option to repair a damaged article. At Triangle Moving Service, we use the AMSA Joint Military/Industry Table of Weights and Depreciation Guide to determine item weights and depreciation values.

Another avenue to explore for coverage is home owners or renters insurance. In many cases, this coverage will be adequate to cover the property in transit, and the client need not expend the extra dollars for additional coverage. It is always wise for the homeowner to check with their local agent, since not all policies are written the same way and some exclude transit damage. If there should be a claim in many cases the basic value protection the moving company provides will be adequate to cover the deductible of the homeowners claim, leaving little or no payout from the insured. However, some clients prefer to purchase the additional coverage rather than chance a claim against their homeowner’s policy which may result in higher homeowner’s insurance rates in the future.

Lastly, here are a few other points about valuation coverage. The shipper must inform the carrier in writing on the carriers documents about any items exceeding a value of $100.00 per pound. Without this declaration, the carrier is liable for no more that $100 per pound for any of  these lost or damaged articles. In addition, most carriers will require you to sign a limitation of liability for particle board, which limits the carrier to coverage of 60¢ per pound per article regardless of what coverage applies. This is because particle board is inherently weak and prone to deteriorate without fault of the carrier. Also, should a damaged article be part of a set, such as a dining room table and chairs, and one item is damaged, the carrier is responsible only for the damaged article, not the whole set. Most moving companies will decline claims for items that were packed by the shipper, unless mishandling of the box is witnessed or evident by the condition of the carton. At the close of your move it would be wise to inspect all cartons for visible damage before your mover departs and inspect the contents if exterior damage is evident.