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Homes Overseas October 2007

Movers or shakers?

homes-overseas-oct-2007For many planning to move overseas, 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.

Specialist international movers offer transit and storage insurance which covers goods while in transit, during incidental storage en route, and while professionally stored.  However, any UK remover that offers an insurance policy must show it is regulated by Financial Conduct Authority (FCA). Any insurance 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 usual 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 held in storage to be moved overseas is not only useful for storage and moving cover, it can also be used for household insurance at your destination. Some moving companies are able to offer this service, and if necessary in the case of antiques, 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.

Some non-FSA approved removals companies are offering insurance based on their own extended public 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 for overseas moves.

Insurance may be a factor in 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.

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 via a distant third party country.  Additionally, on making a claim, some removals companies make the process difficult 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.

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.