A Guide to Removals Insurance
How does removals insurance work?
First, you need to sort out exactly what you’re taking with you and how much you want to ensure it for. You should ensure normal household goods and personal items for the cost of replacing them and any antiques or works of art for their current market value. Any items that are worth over £500 will have to be individually declared.
Many international removals companies will offer insurance as an add-on but it’s also possible to obtain it from third parties and even to use something called a marine insurance broker. The cost of insurance depends on the type of items you’re insuring, the particular route they’ll be taking, the mode of transport they’ll be travelling by and whether your items have been professionally or owner packed.
Remember, if the moving company says it is insured, it doesn’t necessarily mean that the customer is insured. It’s likely that you will still need to take out insurance.
You supply the insurer with a list of the items you want to ensure and their insurance value (itemising any expensive items as requested – usually those with a value exceeding £750).
To ensure an automobile you’ll normally have to provide more detail about the vehicle – age, model etc – so that its second-hand value can be determined. If you want to ensure the vehicle against all damage (minor scratches etc) you and the insurer will also have to co-sign a certificate of a condition.
Most insurers will exclude certain items – no insurance for foodstuffs, houseplants or very fragile items like stamp collections. Most food and plant materials wouldn’t clear customs anyway though and small fragile items are better off in your carry-on or hand luggage.
How to keep insurance costs down
As always the key to securing a better deal is to shop around – you’re not restricted to purchasing insurance from your removals company so get as many quotes from third parties as possible.
You should also think carefully about which of your items warrant insurance. If an item is going to be hard to replace in your destination country then taking out insurance will make sense, as well as giving you peace of mind while you wait the two weeks or more it takes for your shipment to arrive.
Keep in mind that you will be reimbursed for damaged items for the value of the item at your destination country. Items of purely sentimental value are irreplaceable anyway so it may not be worth the extra expense to insure them.
You might even decide to forgo insurance altogether and take the chance that your IKEA favourites don’t end up in Davy Jones’s locker.
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Different types of removal insurance
At an early point in the process, you must decide which type of insurance you want. This decision will depend on your budget, the items you are transporting and your destination country. Each insurance company has slightly different terms for the coverage they provide, but most providers offer these terms.
Total loss coverage
Total loss coverage only covers you in the case of all the whole cargo being destroyed rather than individual items. This can include fires, cargos sinking and other ‘acts of God’.
All risk coverage
Put simply, this is where the marine cargo insurance will replace or repair any items that are damaged during your journey. There are two types of all risk coverage:
Full replacement coverage
This is the most holistic option and will cover you for most things. For this type of coverage, you will have to have your items professionally packed, accompanied by a complete list of your items with the replacement value of each one.
Lump sum coverage
Instead of ensuring the whole thing, you can opt to ensure your items to a specific amount. For this, will have to list individual items at a minimum price, decided by your provider.
What are the chances of my things getting lost?
Road and air freight are the safest modes of transport for international removals so for moves on the same continent, the chances of your goods getting lost are pretty slim. Air freight has an accident rate of one per 1.2 million flights.
Sea freight is a dicier business. About 90% of the world’s cargo travels by sea and despite the gigantic proportions of modern container ships, they can still lose part of their loads in rough seas.
Estimates of how many sea containers are lost each year range from about 350 to around 10,000. But given that the equivalent of 183 million 20-foot containers are shipped annually, even the high estimate gives you odds of 18,300 to 1 that the particular container storing your items will become the home of an odd looking deep sea creature or two.
Of course, the main risk to your goods is not that they’ll be lost completely but that they’ll be damaged during transit. During long voyages, it can be hard to protect shipped items from mould and mildew. Electrical and mechanical items can also be at risk of having their internal components displaced, rendering them unusable. Be sure to check whether your proposed insurer covers both these eventualities.
Questions to ask your insurance provider
- Is all risk insurance cover offered, which insures your shipment for its full value once at your destination?
- What are the procedures and deadlines to make a claim?
- What are the applicable deductions in the case of a claim? Applicable deductions are certain conditions where the insurance provider is not obliged to pay out. These conditions can include anything from insufficient packing of items to illegal activity on behalf of the insured.
- Does the insurance cover door to door service, port to port, door to port or port to door?
Making a claim against removals insurance
Insurance policies for international removals won’t normally involve an excess so you’ll be able to make a claim for the full value of the insured items you lost (though this is sometimes subject to your removals company belonging to a certified trade body).
Make sure your insurance company has a transparent and easy to understand claims procedure before completing your insurance purchase.
In the event that you need to make a claim do it as soon as possible – most insurers will insist that claims are made within a set timeframe after your shipment arrives (or is declared lost).
Don’t throw away any damaged items – your insurer may want to inspect them.
Settling an insurance claim can take a while so you might want to think about setting aside some of your relocation budget for making emergency purchases.