Insurance

Insurance basics

Are you insured?

People ask us this all the time. It always strikes me as an odd question, but then I remember that legal and regulatory compliance aren’t exactly…ah…a given in the moving industry. We’re among the few “morons” in the industry who actually play by the rules.

But to answer the question: Yes, we are insured. We have several forms of it, actually:

  • General liability
  • Cargo
  • Commercial auto
  • Workman’s compensation

If you live in an apartment building that requests a COI (Certificate of Insurance), we can provide that for you pretty quickly.

Additional forms of coverage

As My Truck Buddy has grown up, we’ve had to bring our operations into closer alignment with certain regulations or just industry standard practices, policies and procedures, particularly from the Federal Motor Carrier Safety Administration (FMCSA). The sections below outline one of the newest — and biggest — areas of compliance to-date. We will now be offering additional coverage in the statistically unlikely event of serious damages.

Hopefully I’ve explained a somewhat complicated topic as simply as possible, but if you have any questions, please don’t hesitate to call us. Also, it would be a good idea to check your homeowner’s or renter’s insurance policy to understand the value of your goods, and what is or might not be covered.

Types of Additional Coverage

Federal law requires that we offer two different liability options referred to as valuation coverage*:

  1. Released value protection
  2. Full value protection

Released Value Protection
This is the most economical option because it is offered at no additional charge. However, the coverage is minimal — under this option, liability is limited to 60 cents per pound (or $6.00 per ten pounds). So, if for example a ten pound flat screen TV valued at $1,000 is damaged, you would only receive $6.00 in compensation (60 cents x 10 pounds).

This is the federally mandated default level of coverage, and again, it’s provided at no extra charge. Nonetheless, if you opt not to obtain additional coverage, you still have to sign a specific statement agreeing to it. If you don’t select Released Value, your goods will automatically be transported at the Full Value Protection level of liability and you will be addressed the applicable charge. (I know how this must sound, but regrettably I don’t make the rules — again, I’m just reporting the federally mandated facts.)

Full Value Protection
Full Value Protection is the more comprehensive coverage option for your belongings. It is offered at an additional cost, but fortunately we’ve made it very reasonably priced. Is is optional, but just keep in mind that you’ll have to sign a document noting that you’ve declined the extra coverage, if that’s what you want to do.

Under Full Value Protection, the mover is liable for the replacement value of lost or damaged goods in your entire shipment. If any article is lost, destroyed or damaged while in our custody, we will offer to do one of the following:

  • Repair the item
  • Replace it with a similar item
  • Make a cash settlement for the cost of the repair or the current market replacement value.

Articles of Extraordinary Value
A sort of special case exists for items called “Articles of Extraordinary Value (AEV). AEVs are defined as items whose value exceeds $100 per pound. (FMCSA uses the examples of jewelry, silverware, china, furs, antiques…) Here’s the critical thing about these: AEVs must be specifically disclosed, otherwise we are “permitted” (FMCSA again…) to limit our liability for these kinds of items. Make sure to ask us about it before your move.

Full Value Protection and Released Value are not insurance policies governed by State insurance laws; instead, they are Federal contractual tariff levels of liability authorized under Released Rates Orders of the Surface Transportation Board of the U.S. Department of Transportation.

* For more information, and evidence that I’ve largely plagiarized this section, please check out the FMCSA’s web page on insurance.

Determining your level of coverage

Great. So there’s extra coverage available. But how do you know how much you’ll need?

For the most part, the moving industry uses the metric of pounds to determine value, rates, etc. That might seem strange because obviously nobody comes out to your house with a giant scale to weigh all of your belongings. Instead, it uses a table that bases value on the average weight and size of common household objects. We were dubious about that when we first began this process, but after testing it for a bit, we’ve found that it’s surprisingly accurate.

So, how to determine the value of your belongings?

A good rule of thumb says the contents of a typical room weigh about 1,000 pounds. If the value per ten pounds is $6.00, that makes the minimum value for a local move $6,000 per room (1000 lbs x $6.00).

Let’s say you’re moving a two-bedroom apartment. You would then need about a $12,000 policy. (Two rooms plus a little extra for the kitchen and other areas.) We have coverage levels in that ballpark. For this example, we’ll just take the $12,500 policy (look about a third of the way down the left-hand column in the table below).

Determining your deductible

The next thing you’d want to do is determine the deductible you’d like to pay. Naturally, nobody wants to pay anything, and that is an option. However, it’s a trade-off. No deductible means a slightly higher policy cost. But if you want to keep up-front costs as low as possible, then opting for the lower-policy cost and a higher deductible is an option.

So, using the table below, starting with the $12,500 policy in the left-hand column, we see four different deductible levels. If you want a low deductible in the statistically unlikely event of serious damages, your policy would be $131.25. If you go to the other end of the scale (the far-right column) and opt for a higher deductible in order to keep the policy cost as low as possible, the coverage would cost $62.50.

Policy Value $0 Deductible $100 Deductible $250 Deductible $500 Deductible
$2,500 $26.25 $22.50 $17.50 $12.50
$5,000 $52.50 $45.00 $35.00 $25.00
$7,500 $78.75 $67.50 $52.50 $37.50
$10,000 $105.00 $90.00 $70.00 $50.00
$12,500 $131.25 $112.50 $87.50 $62.50
$15,000 $157.50 $135.00 $105.00 $75.00
$17,500 $183.75 $157.50 $122.50 $87.50
$20,000 $210.00 $180.00 $140.00 $100.00
$22,500 $236.25 $202.50 $157.50 $112.50
$25,000 $262.50 $225.00 $175.00 $125.00
$30,000 $315.00 $270.00 $210.00 $150.00
$35,000 $367.50 $315.00 $245.00 $175.00
$40,000 $420.00 $360.00 $280.00 $200.00
$45,000 $472.50 $405.00 $315.00 $225.00
$50,000 $525.00 $450.00 $350.00 $250.00

How likely is it that you’ll actually have to use the policy?

Well, statistically speaking, our track record is very, very good. Minor scrapes and dings are more likely to occur than serious or even catastrophic damage. In the end it comes down to your tolerance for risk and the value of your belongings. Whatever level of coverage you choose, I can tell you that the most important thing to me (after the safety of my guys) is the successful and flawless delivery of your items to their final destination.

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