Do You Need Moving Insurance?

Quick Answer

Yes, you need moving insurance if you want more than the mandated movers coverage which will only pay $0.60 per pound of your belongings if damage occurs.

A family of four smiles while carrying boxes into their new home.

You might assume that when you pack up all your belongings and pass them over to a moving company, their commercial vehicle insurance coverage protects your items on the way to your new house. But, just like your own belongings are not covered by your car insurance when they're in the backseat, your belongings need secondary moving insurance coverage to be protected in transit.

What Is Moving Insurance?

Moving insurance is insurance that covers your belongings when you are moving it from one property to another. It is provided by both moving companies and third-party companies. Moving insurance policies typically pay you a percentage of the value of your items if they are damaged or lost.

Moving Company Moving Insurance

The moving insurance offered by your moving company consists of two types of coverage:

  • Released value protection: Federally mandated minimum coverage of $0.60 per pound of personal belongings for interstate moves. For local moves, coverage amounts vary from state to state. Released value protection is free to customers and provided automatically.
  • Full value protection: Covers up to the actual cash value (depreciated value) of items. If you are moving items of extraordinary value—defined as something worth more than $100 per pound of its weight—you must inform the mover in writing about the items to receive appropriate coverage. There is a charge for full value protection.

When choosing between released value protection and full value protection, consider a common item such as a MacBook Air, which weighs 2.8 pounds and sells new for $999. If you simply relied on released value protection, you would receive about $1.80 if the laptop is damaged or destroyed.

If you paid for full value protection and made sure to note the laptop's presence in writing as an item of extraordinary value, you would receive a depreciated value of the laptop, which would likely go much further toward mitigating its loss than $1.80.

Third-Party Moving Insurance

For more coverage, property owners can purchase third-party insurance options as well from companies that specialize in moving insurance. Some policies to consider include:

  • Liability coverage compensates you for the rest of your loss on top of what released value protection provides.
  • A floater can apply to specific, expensive items like art or jewelry.
  • Special perils contents coverage applies to damage to particular items (excluding breakables).
  • Trip transit insurance specifically applies to threats to your belongings while the movers are in transit.

You may also be able to count on some limited coverage from your homeowners policy. If the damage that occurs to your belongings falls under a "named peril" within your homeowners policy, such as theft, you may be able to file a claim for the stolen items. Depending on the value of your items, your homeowners policy may not cover the entire cost of your belongings, so check with your insurer before relying totally on this coverage for a move.

What Does Moving Insurance Cover?

The different types of moving coverage applies to various items and damages that may occur during the move. Understanding what is and is not covered is essential to making an informed decision about purchasing additional moving insurance.

Valuation coverage applies to damages or loss up to a set price, such as the $0.60 federally mandated for released value protection or the actual cash value mandated by full value protection. But it will not apply to:

  • Boxes you packed yourself
  • Damage from natural disasters
  • Unnoted items of high value
  • Unreported damage or loss outside of a set time frame

Importantly, if you opt for only full value protection, you may not simply get money for your items. The moving company technically has the option to settle up with you by:

  • Repairing damaged items
  • Replacing damaged items with something similar
  • Making a cash settlement that matches market value or repair cost of the item

With all of your worldly possessions in the hands of movers, these provisions may be too limited for you to feel comfortable. You're likely to find more coverage with third-party moving insurance, which typically covers:

  • All items including items of extraordinary value
  • Items damaged by natural disasters
  • Up to the face value of the insurance you purchased after the movers pay for the released value

If you are strictly looking to be paid out if your property is damaged or destroyed, third-party moving insurance is your best option.

How Much Does Moving Insurance Cost?

While moving insurance may just feel like one more expensive cost on top of an already expensive move, its cost-to-value ratio may make this type of insurance extremely worth it, especially if the value of the items you plan to move is high.

Costs for moving insurance may be:

  • Free: The federally mandated minimum released value protection for $0.60 per pound is included in the price of your move.
  • 1% of valued items: Full-value protection is an additional fee paid to the movers for about 1% of the items getting moved.
  • 1% to 5% of the valued items: Third-party moving insurance costs the most, but will also give you the most coverage for your belongings.

The Bottom Line

When you're packing your life up into boxes and entrusting your personal property to a moving company, moving insurance may help provide some peace of mind that your items have an extra level of protection when they're out of your hands.