Whether you are upsizing, downsizing, moving across town or cross-country, before a move it is important to review your homeowners or renter’s insurance policy. Below are a few things the National Association of Insurance Commissioners (NAIC) suggests checking before the first box is packed.
Call Your Agent
Not all insurance companies or agents are licensed to write in all states, so moving out of state could mean big changes in your homeowners or renter’s insurance policy. Talk with your agent to see if a current policy can be transferred to the new home, or if it’s time to start checking out new companies or agents. Check here for tips on finding a new agent or company.
Even just moving across town can affect the cost of a policy. Your agent will need to know details about the new home like its age, construction material, type of roof, square footage and interior finishes. They will also need the details of your mortgage lender.
Provide the agent with a timeline for the move so coverage is transferred to the new home in a timely manner. Also confirm that household belongings will be covered during the move.
If you hire a moving company, expect to be asked about insurance. Homeowners and renter’s insurance will likely provide limited coverage for household belongings in transit. The policy deductible will apply to any claim made for a loss on these items, so check your deductible amount and how it is applied before the move.
Moving companies generally offer basic insurance coverage. The amount is based on the weight of the items moved and federal (if moving state-to-state) or state (if moving in-state) laws. Typically this basic coverage is approximately $.30/pound in state and $.60/pound for an interstate move. Carefully review the moving contract for the value in your move.
The moving company may offer additional coverage for a fee. Coverage for a lump sum value may be one option. This coverage is typically based on the value of items rather than the weight. You must know the value of the shipment and make a declaration in writing on your receipt (often referred to as a “bill of lading”). Coverage for full value protection may also be offered. This coverage will pay for the replacement or repair of lost, damaged or destroyed property.
Be aware that securing a settlement from the moving company or its insurance company may take quite some time. It is a good idea to inspect your personal property immediately upon delivery at the new home. Note any damages immediately to the moving company and ensure they sign off on a list of the damaged property before the moving truck drives away.
Finally, if the moving company will be towing the family car, your personal auto insurance policy should provide coverage for liability while in transit. If your policy also covers physical damage to the car, that should apply while the car is being towed. Check the policy and talk with your insurance agent about what limits apply while the car is in the moving company’s possession.
Do It Yourself
If friends and family have volunteered with the relocation, you will likely need to rent a truck. Some personal auto polices may provide coverage for the driver’s liability in a rented truck, but many do not. Review your policy closely for coverage and limitations before renting the truck. Pay particular attention to any exclusions based on the size of the truck.
If your personal auto policy does not provide coverage, you may have the option to purchase insurance coverage as part of the rental agreement. Two common options are Supplemental Liability Insurance (SLI) and Limited Damage Waiver insurance (LDW). SLI covers a claim made against the driver of the truck or the moving truck rental company by another party. LDW protects the consumer from having to pay for damages to the rental truck. In both cases, there is generally a limit to how much the supplemental coverage will pay.
A rental truck company may also offer insurance on your belongings. The coverage will be similar to what a moving company will offer.
Becoming a Landlord
In this economy, people are often having difficulty selling their home. In this case, renting out a home is becoming a more popular option. However, keep in mind that when the house becomes a rental property it has gone from being a residence to a place of business, so it is important to understand how this changes the insurance requirements.
A landlord insurance policy (sometimes called a “dwelling fire policy” or a “special perils policy”) covers the house itself, other structures on the property, the owner’s possessions (like a washer and dryer left for tenant’s use), lost rental income if the house becomes uninhabitable and some liability protection. Tenant possessions are not covered in landlord insurance policies.
Expect to pay between 10-25% more per year than you paid for your homeowners policy. Policies for short-term rental and long-term rental will likely differ in price.
Moving is a good time to take a home inventory or to update your existing inventory. As rooms of the new home are unpacked, take photos and make a list of the belongings. Find a template to get started on a home inventory here.
Vacant or unoccupied homes can leave the homeowner exposed to loss and liability that may not be covered by a homeowners insurance policy. Find out more about how an insurance company evaluates and covers vacant homes here.
Insurance can be confusing – but by understanding the choices you can make educated decisions about your insurance needs. For more information about homeowners or renter’s insurance, go to www.InsureUonline.org and choose the life stage that best fits your life situation. Or download the NAIC Consumer's Guide to Home Insurance here.
For specific questions about coverages or about an insurance company or agent, call the consumer representatives at your state insurance department. To quickly find their contact information go to http://map.naic.org.
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more consumer information, visit InsureUonline.org.
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©2011 National Association of Insurance Commissioners. All