How safe is your goods and do you really need it?
When you’re planning your relocation, insurance can be the make or break factor in the success of your move. Getting the correct type of cover is important to avoid getting a rude shock if you end up need to claim compensation for items lost or damaged during the shift.
Many people are unaware that their belongings are not automatically covered by their home contents insurance policy during transit. They may also not know that most insurance companies do not accept liability for damaged items if the owner packs the belongings themselves.
If you opt to move without engaging the services of a professional mover, then insurance is usually not on the table as an option.
How premiums are calculate
The amount of premium you pay is determined by the following considerations:
- Type of insurance cover – full or restricted cover
- Basis of settlement – replacement cost or market value
- How far the items will go and the method of transport
- Nature of goods being removed – high value or high risk
- Any excess charges applicable to the policy
- How items are packaged
- Any history of claims the client might have
Premium costs usually range between $18-30 per $1,000, with an additional 22-70 cents per $1,000 for every week in storage.
It is important to check whether the removal company you use is a member of The Australian Furniture Removers Association or AFRA. AFRA members are required to have policies which cater for Public Liability, Carriers Liability and Motor Vehicle Third Party Liability in case they incur any claims resulting from negligent behaviour.
For a removal company to be accredited to AFRA it must meet certain criteria including employment of qualified staff, equipment, premises and vehicles necessary to provide professional moving services.
Provision of insurance by professional removers
Professional removers who are fully accredited to AFRA are allowed by law to sell the appropriate insurance to their clients.
There are two types of insurance cover: restricted cover option and full cover option.
- Restricted cover insures against the loss or damage to goods resulting from causes clearly pointed out by the insurer such as fire, lightning, and floods, or accidents suffered by the vehicle, aircraft or vessel doing the conveyance.
- Full cover insures against loss or damage to belongings while on transit, including any accidental damage during handling by the appointed remover.
Cover during storage
Removal companies usually offer basic insurance cover designed for goods in transit, although the policy can be extended to cater for temporary storage. An additional weekly insurance premium is charged for the period the belongings are in storage.
Settlement of claims
You can select what basis to use for settlement of a claim in the event of loss or damage of your insured belongings. The basis of settlement is determined by factors such as depreciation and the specific nature of the insured items. Two methods are used to determine the amount to be compensated:
- Replacement cost, which covers the full replacement cost of your insured belongings, depending on the terms and conditions of the policy
- Market value option, which factors in depreciation to calculate the replacement cost in situations where a total loss is incurred
Insurance in new premises
Once you have completed the move you need to provide your insurer with information on your new home if you wish to continue benefiting from your current contents insurance. Remember that your premiums are calculated based on the type of property you occupy, your location, and the value of your belongings. The insurer will need this information to recalculate your premiums to meet your new circumstances.
Compare different insurance companies
Moving is also usually a good time to re-evaluated the terms offered by your current insurer. It is always good to check if there are more competitive insurance policies on offer. Should you decide to change, you should also first find out if there are cancellation charges involved.