Moving Insurance: What the Heck Is Valuation?
The following information comes from and can be found in the North Carolina Utilities Commission Moving 101 Guide.
Customers will often ask movers, “What kind of insurance do you have in case something is lost or damaged?”
The North Carolina Utilities Commission requires movers to have cargo, auto, and general liability insurance. But, the settlement of your claim is defined by the valuation you select.
What Is Valuation?
Valuation establishes the total value of your shipment in case of catastrophic loss and also governs how the mover will resolve your claim for loss of or damage to individual items.
There are three types of valuation available for both weight/distance and hourly-rated moves. You must explicitly indicate your choice in two places: on the Bill of Lading and on the Addendum to the Bill of Lading (making sure that they both show the same choice).
It’s important to note that the type of valuation you choose will cover the entire shipment. You cannot select one type for part of the shipment and another one for select pieces.
Also, be aware that hourly-rated shipments are not weighed. Therefore, if you decide to purchase depreciated or full value protection for an hourly-rated move, the mover will estimate the weight of your shipment to calculate its value.
REMEMBER: You must select your level of valuation before the move begins. Once it starts, the selection cannot be changed. Also, be sure to provide the mover with a list of items you believe to be of extraordinary value (see Articles of Extraordinary Value). While preparing that list, customers sometimes realize that they have undervalued their shipment by simply accepting the minimum required. If everything on the truck is destroyed, are you prepared to accept a check for the value of the shipment shown on the estimate? If not, talk to someone about declaring an increased amount (and paying a higher fee).
Types of Valuation
Basic Value Protection – No Charge
A mover’s maximum liability is 60¢ per pound based upon the weight of any lost or damaged items, regardless of its actual value. For example, damage to your refrigerator weighing 400 pounds would result in a maximum claim settlement of $240. Basic Value Protection provides minimal protection, and it is possible that settlement of any claim under this level of valuation will not be satisfactory to you. Under this type of valuation, for example, if the total weight of your shipment is 8,000 pounds, then the total value of your entire shipment is established to be $4,800.
Depreciated Value Protection – 50¢ Per $100 of Value
The minimum value of the shipment will be $1.25 times the weight of the shipment. However, you have the right to declare that your shipment has a greater value and pay for that increased protection. When submitting a claim, you need to provide the replacement cost and the age of the lost or damaged items. You may ask your mover for the source of its depreciation rates. Many movers use the depreciation guide supplied by the American Moving and Storage Association. For example, damage to a seven-year old, $200 end table depreciated at a rate of 7% per year results in a depreciated value of $102. Movers have the options of paying you the depreciated value, repairing the item, or paying the repair cost. Under this type of valuation, for example, if the total weight of your shipment is 8,000 pounds, then the total value of your entire shipment is established to be $10,000 and the charge for that level of protection would be $50. However, if you decided that your shipment has a greater value, maybe $15,000 rather than the calculated minimum of $10,000, you could establish that your shipment value is $15,000 and the charge for that level of protection would be $75.
Full Value Protection – 75¢ per $100 of Value
The minimum value of the shipment will be $4.00 times the weight of the shipment. However, you have the right to declare that your shipment has a greater value and pay for that increased protection. If items are lost, the mover will have the options of replacing them with articles of like kind and quality or paying the replacement cost as determined by current market value. If items are damaged, the mover will have the same options, plus the additional options of repairing the items or paying the repair cost. All damaged items that are either replaced or reimbursed at full-market value become the property of the mover. Under this type of valuation, for example, if the total weight of your shipment is 8,000 pounds, then the total value of your entire shipment is established to be $32,000 and the charge for that level of protection would be $240. However, if you decided that your shipment has a greater value, maybe $45,000 rather than the calculated minimum of $32,000, you could establish that your shipment value is $45,000 and the charge for that level of protection would be $337.50.
The Bottom Line
Unless you have a good reason, go with Full Value Protection. If you need additional insurance beyond what it covers, buy it. If you have any items of extraordinary value (that exceed $100 per pound), be sure to note them on the Bill of Lading.
