Relocation Insurance Education: All Risk Policies - Valued Inventory vs. Lump Sum

There are several options consumers can choose from when insuring their possessions during a move or while in storage. Today, our focus is on the two types of All Risk policies Relocation Insurance Group offers: Valued Inventory and Lump Sum.

Full Replacement Value - Valued Inventory

• Advantage: By providing a detailed inventory, you are specifying all individual items that you want insured. All items listed are insured up to the replacement value based on the Terms and Conditions.

• Disadvantage: Items not listed and valued are not insured. If you do not list ALL of your personal effects, you are not insuring your entire shipment.

Full Replacement Value - Lump Sum

• Advantage: Declare a total lump sum of your shipment and list (with values) only items that are $500 or greater in individual value. Items below $500.00 (USD) in individual value do not have to be listed and are covered at their declared or replacement value and at a maximum of $500 each. Your total lump sum value must include the value of both listed, as well as non-listed items.

• Disadvantage: If you declare a total lump sum value lower than the actual total value of your shipment, or lower than $6.00 times the weight of your shipment, you may be underinsured and subject to the Co-Insurance clause.

Extra Credit: Co-Insurance

A clause under the Terms and Conditions of the policy, which determines the settlement compensation amount in case of a claim. Co-Insurance, or Underinsuring, is a situation in which a shipment or an item is insured for less than its replacement value. Settlement will be proportional to the declared value versus the replacement value of the shipment or item.

For example, if you insured your goods for $10,000 (i.e., a declared value of $10,000) while the entire replacement value of the goods is $100,000, your proportionate claim settlement amount (in case of a claim) would be 1/10 of the actual value. A lost table worth $1,000 will yield a settlement in the amount of $100 (minus any deductible, if applicable).

If your shipment weight is 5,000 lbs, the minimum policy amount required is $30,000. Unless you opt to complete a Full Valued Inventory, in order to avoid co-insurance, you must purchase coverage at a minimum of $6 per pound based on the weight of your shipment.

More information on all coverage options offered by Relocation Insurance Group