For many planning to move, the worry that their treasured items may be damaged or lost during the move is lifted by the assumption they are fully insured. However, this may not always be the case. Any removals company giving advice or providing policies must be regulated by Financial Services Authority (FSA). Any offer will include a Keyfacts statement and their FSA registration number.
Financial Services Authority
Only FSA authorised removals companies will have been subjected to stringent quality and financial control procedures to be allowed to offer insurance. However, an apparent alternative being offered by non-FSA approved removals companies is a scheme based on their own extended legal liability. Such schemes, often with the quoted term “subject to”, are a minefield, with too many loopholes and exclusions, and customers should be very wary of any mover using this approach.
Levels of insurance available
Specialist movers offer transit and storage insurance which covers goods while in transit, during incidental storage en route, and while professionally stored. It is usually available at either an additional cost or, more rarely, included in the removal quote. There are three levels of cover which can be offered: ‘A’, ‘B’ and ‘C’ clauses. ‘A’ is the highest level of cover, usually referred to as ‘all risks’, whereas ‘C’ clauses are the lowest level, described as ‘total loss only’ or ‘restricted cover’.
Then you have two types of policy – ‘like-for-like’ (reinstatement) and ‘new-for-old’ (replacement). ‘Like-for-like’ cover means that claims will take into account age, wear and tear, and current value as a second hand item. This may result in a claim for thousands of pounds being turned into a settlement of mere hundreds. ‘New-for-old’ is for a true direct replacement, although this insurance usually carries a higher premium.
Companies with mainly a road removals operation tend to offer a ‘block policy’ via an insurer. Here, the insurance company will base a premium upon the remover’s turnover, with the remover, in turn, offering cover to its customers based upon the removal cost, typically at an additional 10 to 17.5 per cent. Block policies are normally for ‘A’ clauses, but with specific stated exclusions and only a ‘like-for-like cover’.
The block policy insurance document should state these exemptions, as well as the financial limit of cover. This needs to be checked carefully to ensure it is adequate for you in case of total loss – as it is no good discovering after the event that treasured possessions were not covered to their full value after being burnt to a crisp in a road accident!
The alternative to a block policy, and common for moving overseas, is insurance cover based on a detailed valued inventory. Here, the insurance company will quote a premium per £100 or as a percentage of the total value of the declared inventory. The insurance rates of such policies will change widely depending on the type of cover, for example whether it is ‘A’, ‘B’ or ‘C’ clauses, with specific exclusions and if ‘like-for-like’ or ‘new-for-old’. Ensure it will cover you at replacement value at destination. Careful assessment is needed to compare various offers you may receive.
Having a detailed inventory drawn up of items to be held in storage or to be moved is not only useful for storage and moving insurance cover, it can also be used for household insurance. Some moving companies are able to offer this service, and if necessary in the case of antiques and other valuables, photograph items prior to moving. However, it is very essential goods are correctly valued. If the actual value of the goods is double that of the value declared, the amount of any claim will be reduced proportionately, i.e. 50% in this instance, under what is termed by the insurance company as ‘the condition of average’.
Additionally, movers require in advance an inventory of valuable, fragile or sets of items over a certain value, typically over £1,000. Timely failure to do so may result in a reduced final payout in the event of a claim.
Insurance may be factored into the decision whether to pack goods yourself or get the removals company to do it. Owner-packed goods can be insured for most risks, but breakage, denting, chipping, scratching and bruising will be exempted by the insurance company, as they usually arise through poor packing. Consequently, insurers also insist on a detailed inventory of owner packed goods.
Some items require special insurance agreements in advance. These can include very high valued items, collectibles, tobacco products, alcohol, non-perishable foodstuffs, or furs.
Making a claim
If moving abroad, it is important to establish, before agreeing to insurance, where a claim would have to be made. Customers might be happy to deal with a UK company, but not so via a distant third party country. On making any claim, some unscrupulous removals companies make the process as difficult as possible as it affects their future premiums and profit share. Furthermore, some companies self-insure so they have a vested interest.
To avoid and discourage petty claims, there is usually an excess amount on the policy of around £25 - £100. Some movers may settle this as a gesture of goodwill if you are deemed a good customer. There are strict time limits from delivery to when a claim can be accepted, usually up to seven days, or on collection if self-hauled from the warehouse. It is essential all goods are unpacked and examined within the time limit for making a claim.
In making a claim it must be substantiated by the claimant, involving repair estimates and replacement quotes. In the case of large claims, an assessor or loss adjuster may well be employed by the insurer. Any item replaced by the insurer becomes their property as ‘salvage’, and no longer belongs to the insured.
Insurance claims can be rejected if they arise from events and incidents involving loss or damage due to vermin, moths, leakage of fluids, gradual wear and tear or deterioration, an inherent defect, radioactivity, war, terrorism, public disorder, pressure waves from aircraft, climatic changes, and confiscation or seizure by customs or government bodies.
When moving overseas to high risk areas war and conflicts are a consideration. Some removers include this eventuality within the quote, others offer it as an optional extra. Called Institute War Clauses (Cargo), cover applies to goods when in transit by sea or air, but not for some reason whilst on land. Even then, there are certain volatile countries that are totally excluded, as would be expected.
In the event of a dispute over a claim, movers and insurers, FSA approved, must have a complaints procedure. If still not satisfied, the customer can also refer the matter to the FSA for review.
Insurance is complicated, but it is essential customers understand the nature and level of the cover they are taking out. They should ensure a summary of the cover document is supplied by the remover, and that it states all the necessary information and makes clear what has to be done to be insured correctly.
Finally, an excellent measure of the risk of making a claim with the proposed remover is to look at their claims history. A remover with a low level of claims would be happy to disclose information indicating they are good operators, however, others with a high claim level would be somewhat reticent.