Insurance

The Mover's Liability For Loss And Damage

All moving companies are required to assume liability for the value of the goods which they transport. However, there are different levels of liability, and consumers should be aware of the amount of protection provided and the charges for each option.

Basically, most movers offer four different levels of liability under the terms of their tariffs and pursuant to the Surface Transportation Board's Released Rates Orders which govern the moving industry.

OPTION 1: RELEASED VALUE

This is the most economical protection option available. This no additional-cost option provides minimal protection. Under this option, the mover assumes liability for no more than 60 cents per pound ($1.32 per kilogram), per article. Loss or damage claims are settled based on the pound weight of the article multiplied by 60 cents (or the kilogram weight multiplied by $1.32). For example, if a 10-pound (4.54 kilogram) stereo component, valued at $1,000 were lost or destroyed, the mover would be liable for no more than $6.00. Obviously, the shipper should think carefully before agreeing to such an arrangement. There is no extra charge for this minimal protection, but you must sign a specific statement on the bill of lading agreeing to it.

OPTION 2: DECLARED VALUE

Under this option, the valuation of your shipment is based on the total weight of the shipment times $1.25 per pound ($2.75 per kilogram). For example, a 4,000-pound shipment (1814.4 kilogram) would have a maximum liability value of $5,000.00. Any loss or damage claim under this option is settled based on the depreciated value of the lost or damaged item(s) up to the maximum liability value based on the weight of the entire shipment. Under this option, if you shipped a 10-pound (4.54 kilogram) stereo component that originally cost $1,000, the mover would be liable for up to $1,000, based on the depreciated value of the item.

Unless you specifically agree to other arrangements, the mover is required to assume liability for the entire shipment based on this option. Also, the mover is entitled to charge you $7.00 for each $1,000 (or fraction thereof) of liability assumed for shipments transported under this option. In the example above, the valuation charge for a shipment valued at $5,000 would be $35.00. Under this option, your shipment is protected based on its depreciated value, and the mover is entitled to charge you a fee for this extra protection.

OPTION 3: LUMP SUM VALUE

Under this option, which is similar to Option 2, if the value of your shipment exceeds $1.25 per pound ($2.75 per kilogram) times the weight of the shipment, you may obtain additional liability protection from the mover. You do this by declaring a specific dollar value for your shipment. The amount you declare must exceed $1.25 per pound ($2.75 per kilogram) times the weight of the shipment. The amount of value that you declare is subject to the same valuation charge ($7.00 per $1,000) as described in OPTION 2. For example, if you declare that your 4,000-pound (1814.4 kilogram) shipment is worth $10,000 (instead of the $5,000 under OPTION 2), the mover will charge you $7.00 for each $1,000 of declared value, or $70.00, for this increased level of liability. If you ship articles that are unusually expensive, you may wish to declare this extra value. You must make this declaration in writing on the bill of lading.

OPTION 4: FULL VALUE PROTECTION

Many movers offer a fourth level of added-value protection, often referred to as "full value protection" or "full replacement value." If you elect to purchase full value protection, articles that are lost, damaged or destroyed will be either repaired, replaced with like items, or a cash settlement will be made for the current market replacement value regardless of the age of the lost or damaged item. Unlike the other options, depreciation of the lost or damaged item is not a factor in determining replacement value when the shipment is moved under full value protection.

The cost for full value protection is approximately $8.50 per $1,000 of declared value; however, the minimum value declared must be equal to the weight of the shipment multiplied by $3.50 per pound ($7.70 per kilogram), which is further subject to a minimum declaration of $21,000.

For example, if your shipment weighs 5,000 pounds (2,268 kilograms), the minimum declared value must be at least $21,000. The exact cost for full value protection may vary by mover and may be further subject to various deductible levels of liability which may reduce your cost. Ask your mover for the details of its specific plan.

Under these four options, movers are permitted to limit their liability for loss or damage to articles of extraordinary value, unless you specifically list these articles on the shipping documents. An article of extraordinary value is any item whose value exceeds $100 per pound ($220 per kilogram). Ask your mover for a complete explanation of this limitation before you move. It is your responsibility to study this provision carefully and to make the necessary declaration.

These optional levels of liability are not insurance agreements which are governed by State insurance laws, but instead are authorized under Released Rates Orders of the Surface Transportation Board of the U.S. Department of Transportation. In addition to these options, some carriers may also offer to sell, or procure for you, separate liability insurance from a third-party insurance company when you release your shipment for transportation at the minimum released valuation of 60 cents per pound ($1.32 per kilogram) per article (Option 1). This is not valuation coverage governed by Federal law, but optional insurance that is regulated under State law. If you purchase this separate coverage, in the event of loss or damage which is the responsibility of the mover, the mover is liable only for an amount not exceeding 60 cents per pound ($1.32 per kilogram) per article, and the balance of the loss is recoverable from the insurance company up to the amount of insurance purchased. The mover's representative can advise you of the availability of such liability insurance and the cost.

If you purchase liability insurance from or through your mover, the mover is required to issue a policy or other written record of the purchase and to provide you with a copy of the policy or other document at the time of purchase. If the mover fails to comply with this requirement, the mover becomes fully liable for any claim for loss or damage attributed to its negligence.

Complaints and Inquiries about the Mover's Service

All movers are expected to respond promptly to complaints or inquiries from their customers. Should you have a complaint or question about your move, you should first attempt to obtain a satisfactory response from the mover's local agent, the sales representative who handled the arrangements for your move, or the driver assigned to your shipment.

If for any reason you are unable to obtain a satisfactory response from one of these persons, you should then contact the mover's principal office. When you make such a call, be sure to have available your copies of all the documents relating to the move. Particularly important is the number assigned to your shipment by the mover.

Interstate movers are also required to offer neutral arbitration as a means of resolving consumer disputes involving loss or damage on collect on delivery (COD) shipments. Your mover is required to provide you with information regarding its arbitration program.

All interstate moving companies are required to maintain a complaint and inquiry procedure to assist their customers. At the time you make the arrangements for your move, you should ask the mover's representative for a description of the mover's procedure, the telephone number to be used to contact the carrier and whether the mover will pay for such telephone calls.

Payment Of The Transportation Charges

At the time for payment of transportation charges, the mover is required to give you a freight bill identifying the service provided and the charge for each service. It is customary for most movers to use a copy of the bill of lading as a freight bill; however, some movers use an entirely separate document for this purpose.

Except in those instances where a shipment is moving on a binding estimate, the freight bill must specifically identify each service performed, the rate per unit for each service, and the total charges for each service. Do not accept or pay a freight bill which does not contain this information.

It is customary for movers to provide in their tariffs that freight charges must be paid in cash, by certified check, traveler's check, or bank check (one drawn by a bank on itself and signed by an officer of the bank). When this requirement exists, the mover will not accept personal checks. At the time you make arrangements for your move, you should ask the mover about the form of payment that is acceptable.

Some movers permit payment of freight charges by use of a charge card. However, do not assume that because you have a nationally recognized charge or credit card that it will be acceptable for payment. Ask the mover at the time the arrangements are made.

If you do not pay the transportation charges at the time of delivery the mover has the right under the bill of lading to refuse to deliver your goods. The mover may place them in storage at your expense until the charges are paid.

If, before payment of the transportation charges, you discover an error in the charges, you should attempt to correct the error with the driver, the mover's local agent, or by contacting the mover's main office. If an error is discovered after payment, you should write the mover (the address will be on the freight bill) explaining the error and request a refund.

Movers customarily check all shipment files and freight bills after a move has been completed to make sure the charges were accurate. If an overcharge is found, you will be notified and a refund made. If an undercharge occurred, you will be billed for the additional charges due.

Payment Of The Transportation Charges On Shipments Transported On Two More Vehicles

Although all movers try to move each shipment on one truck it becomes necessary at times to divide a shipment among two or more trucks. This frequently occurs when an automobile is included in the shipment and it is transported on a vehicle specially designed to transport automobiles. When this occurs your transportation charges are the same as if the entire shipment moved on one truck.

If your shipment is divided for transportation on two or more trucks, the mover can require payment for each portion as it is delivered.

Movers are also permitted, but not required, to delay the collection of all the charges until the entire shipment is delivered. At the time you make the arrangements for your move, you should ask the mover about its policies in this respect.

Payment Of Transportation Charges On Shipments Lost Or Destroyed In Transit

Movers customarily make every effort to assure that while your shipment is in their possession for transportation, no items are lost, damaged or destroyed. However, despite the precautions taken, articles are sometimes lost or destroyed during the move.

In addition to any money you may recover from the mover to compensate for lost or destroyed articles, you are also entitled to recover the transportation charges represented by the portion of the shipment lost or destroyed.

On shipments with partial loss or destruction of goods, the transportation charges must be paid. The mover will then return proportional freight charges at the time loss and damage claims are processed. Should your entire shipment be lost or destroyed while in the mover's possession, the mover cannot require you to pay any of the charges except the amount you have paid or agreed to pay for added liability protection. The fact that you do not pay any transportation charges does not affect any right you may have to recover reimbursement for the lost or destroyed articles providing you pay the charges for added liability protection.

Filing Of Claims For Loss And Damage Or Delay And Dispute Resolution Programs

Should your move result in loss or damage to any of your property, you have the right to file a claim with the mover to recover money for such loss or damage.

You have nine months following either the date of delivery, or the date on which the shipment should have been delivered, to file a claim. However, you should file a claim as soon as possible. If you fail to file a claim within 120 days following delivery and later bring a legal action against the mover to recover the damages, you may not be able to recover your attorney fees even though you win the court action.

While the Federal Government maintains regulations governing the processing of loss and damage claims, it cannot resolve those claims. If you cannot settle a claim with the mover, you may file a civil action to recover in court. In this connection, you may obtain the name and address of the mover's agent for service of legal process in your State by contacting the FHWA.

In addition, interstate movers are required to participate in a Dispute Resolution Program which provides that certain types of unresolved loss or damage claims must be submitted to a neutral arbitrator for resolution. You may find submitting your claim to arbitration under such a program to be a less expensive and more convenient way to seek recovery of your claim. Movers are required to advise all COD shippers of the existence and details of the arbitration program before they accept a shipment to be transported. If the mover does not provide you with information about a dispute resolution program before you move, ask the mover for the details of the program.

Conclusion

Should you have any questions about your move which are not answered in this pamphlet, do not hesitate to ask the mover's representative who handled the arrangements for your move, the driver who transports your shipment, or the mover's main office for additional information.