Moving Insurance - What a Scam!!

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Moving Insurance - What a Scam!!

Postby Tyrone » Thu Apr 03, 2003 1:22 pm

For those who are considering hiring a moving company, you should be aware of a dangerous loophole regarding insurance of your goods.

Most moving companies will have you sign a clause on the bill of lading that says you agree to the basic free insurance coverage of $0.60 per pound. It sounds pretty good right? You are led to believe, if your shipment weighs 10,000 pounds then you have $6000.00 worth of insurance coverage. Not bad for free insurance, you think.

Well, it doesn't quite work that way.

The sixty cents per pound coverage is only paid on the weight of the actual broken item. For example: let's say you shipped a box containing 20 DVD disks, and the box comes up missing (a VERY common occurrence, especially if you marked the box "DVDs"). Well, each DVD in its case weighs about a quarter pound, so 20 DVDs collectively weigh about 5 pounds, and at sixty cents a pound, you will get a big whopping insurance check from the movers for... 3 dollars!

Not bad for a box of 20 DVDs, easily worth $400.

Here's another example: you have a $10,000 imported marble dining room table that weighs 1000 pounds. Upon delivery the movers take it out of the truck and drop it onto the ground. One of the legs snaps in half and splinters beyond repair. Your $10,000 table is now useless. Welp, guess what? You are reimbursed based only on the weight of the damaged piece, not the entire item.So if that one broken leg only weighed, say, twenty pounds, you would get a check for.... 12 dollars!

Starting to get the picture?

To make things worse, the moving company may attempt to sell you additional insurance. This can lead to even worse situations. You don't get any additional protection from this extra coverage which can cost hundreds or thousands extra. Buying insurance from a moving company often leads to one of the following three outcomes, (which you only discover when something goes wrong):

#1) There never was any insurance. The company has simply fabricated a tale that you are being sold insurance coverage. The "insurance premium" you pay goes directly into the pocket of the truck driver who has a beer and a good laugh at your expense.
#2) The insurance you paid for is fraudulent. The company may be selling you real insurance coverage, but without the required insurance sales license their coverage is null and void. States have actually cited moving companies for insurance fraud and for selling insurance without a license! As you probably know, the insurance industry is governed by very strict regulations and guidelines. Chances are that Joe Truck Driver has not completed the legally mandatory requirements of being an insurance sales agent. Whether this is done with criminal intent or not is irrelevant: the relevant fact is that the additional insurance coverage you thought you had is an illusion.
#3) The insurance company doesn't know you. In the rare cases where the moving company is legitimately licensed to offer insurance, the truck driver will often "forget" to turn the money in that you paid for it. After all, in his own mind he is not going to let anything go wrong, so there is no need for extra insurance coverage. With no record of your premium ever having been actually received BY THE PARENT COMPANY, any claim you lodge would of course be denied. Even if the truck driver gave you a receipt, the third party insurance company is not liable for providing coverage for a policy request they never received.

Sure, you could take the due diligence steps of asking the moving company for their insurance sales license information, and then follow up with verifying the information given, and then get the full policy description in writing including any exclusions, and then get 3 references from the insurance company of claims they have actually paid, and then check each of those references individually, and then pay your premium, and then get a receipt for the premium you paid, and then make sure that the main office has actually received your premium....

(Of course, according to a certain train of thought, you are responsible for already knowing all this and if you fail to take any of these steps to protect yourself then you deserve to be scammed.)

Well, it's just not worth the risk. When you think about it, it IS unrealistic to expect to get quality insurance products from a truck driver. Why not ask him for some hot stock market picks while you're at it?

This is yet another reason why the only time I would recommend hiring a mover is if you are absolutely physically incapable of doing it yourself with help from family and friends.

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Location: Charlotte, NC


Postby Michael » Thu Apr 03, 2003 1:37 pm

Tim has a good article that I pointed out to him on his site here in regards to insurance.

But keep in mind, moving companies are not insuring your goods, we are placing a value on your goods. We are not insurance companies.

Thats why I always have said to look out for companies that have you go else where for coverage.

Read the article Tim has on this site for Valuation.

But your right, Tyrone, it is a trick that this internet companies play on people, making them think they are insured for up to $6000.00. Its .60/lb per article. Minimum.

Forget yourself for others and the others will never forget

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