Beware of the Valuation Trap

Blog Post # 2

The Valuation Trap


If you are moving with a major van line and are taking the company's full value protection, ask your sales rep if you need to declare any items as "high-value inventory," and if so, what the threshold level for that is.

For example, when moving with United or Mayflower, the full value protection you are offered covers you on individual items up to $100 per pound, per item, to the dollar amount limit of the valuation you have selected. What this means is that if you have, let's say, a set of 6 crystal goblets that weigh 2 lbs. in total, but they cost you or they are worth $750 ($125 each) then in order for them to be covered in full by the company, you must declare the set of goblets as high-value. If you do not declare the goblets as high-value, then should they become damaged or lost, the company would only reimburse you 2 lbs. x $100 per lb., or $200 - and you would be out for the additional $550.

Another example of high-value inventory would be a high-end, digital camera that weighs 3 ounces, but cost you $800. If you declare it as high-value, you will be covered for damage or loss; if you do not, you would only be covered for 1 lb. (minimum) x $100 per lb., or $100 - and you would be out for the other $700 that the camera cost.

Several basic rules of thumb are applicable here:

1) You (obviously) must be able to substantiate what these items are worth, either will original purchase receipts, recent appraisals or by being able to substantiate the value of the items by the price of comparable and commercially available items.

2) If you are packing your own things, leave the boxes containing any items you wish to declare as high-value open so that the packers or movers can verify that these items are indeed being packed into a particular box or boxes and that they are not damaged.

3) Your best bet for peace of mind is to have the movers pack and unpack any things that you want to declare as high-value, so there is no question as to the condition and/or presence of these items or confusion about who is liable, should a damage or loss occur.

4) Here's the painful part of this (I say that because it will cost you additional money for you to protect yourself properly) - United and Mayflower base their full value protection options on a minimum $6.00 per lb. x shipment weight, minimum. The minimum recommended amount of full value protection on a 5,000 lbs. shipment is $30,000. That $30,000 covers items only up to and including $100 per lb. If you have, let's say, $7,500 worth of high-value items, then you need to add the $7,500 to the base minimum of $30,000 (for the $6.00 per lb x 5,000 lbs.) and cover yourself for $37,500. United and Mayflower do not offer odd amounts of full value protection. Under their rules if you want to cover yourself for $30,000 + $7,500 of high-value, you would have to take the next highest level offered, which is $40,000. If you take the minimum level of full value protection and then declare some items as high value, that later on become damaged or lost, then the van line will not pay you the full amount that you are requesting; they will say that you failed to value your shipment properly and will reduce your settlement for that reason.

Usually, unless your furniture is super-expensive, the standard minimum valuation for the carrier will cover most damage or loss. For example, using the $100 per lb. figure above, if your shipment contains a $6,000 Bombay Chest that weighs 85 lbs. - you do not have to declare the piece as "high-value," because 85 lbs. x $100 per lb. = $8,500, so the piece would be covered. However, if you had a designer, one-of-a-kind signed coffee table that weighs 45 lbs. and costs $6,000, you would need to declare it as high-value, because at $100 per lb. it would only be covered to $4,500 lbs.

Van line companies other than United and Mayflower may have other threshold levels for what is considered "high-value" and may put the value of normal household goods to be something other than $6.00 per lb, so you have to get a clear picture about all of this from the company you are using before the pack or move gets underway.

On a (sorry about all of this -it's a lot to digest and somewhat confusing) less complicated note - the literature given to customers by the large van line companies might contain a worksheet designed to help you figure out the value of your belongings. If your brochure did not have one, ask your sales rep if he/she has one, or knows where you can get one. Most of the major van line companies provide these worksheets for the customer and if the domestic division of the company doesn't have one, their international division certainly would. Your rep should be able to lay their hands on one for you in relatively short order.

Good luck with your move!