What are the Protection Issues When You Move Your Home?

We just moved the office (you knew that, right?). It went pretty smoothly thanks to some great vendors and the most on-the-ball staff any business could ask for. In fact, on the Friday we moved I put out a notice to clients and vendors not to expect us “back on line” until noon on Monday. On the very same morning we moved, at 11:45am the staff was taking calls and making policy changes. We were out of reach of our clients for only 3 hours and 45 minutes. They did a great job!

This is the time of year when many consider up-sizing or down-sizing their homes. Before the details, here is the bottom line on a move of your personal home as it applies to insurance; don’t cancel ANY coverage without talking to us first. A few days of overlap is worth the pennies of additional premium you will pay to avoid serious property and liability gaps in protection.

Serious coverage gaps can arise during the transition between two principal residences, involving both property and liability. This is especially true in a cross-country move, when there can be several days or even weeks between leaving the old house and moving into the new house.

For your personal property (called Coverage C on your homeowners policy) there is a 10% carve out of the total amount of personal property limit on the policy which is available for another residence you may own. This limit caps out at $1,000. This may be fine for a one week vacation, but won’t do much for a complete move. The good news is that the 10% limitation contains a 30-day exception for “personal property in a newly acquired principal residence.”

It is important to note that the 10% limit on your personal property applies only while the property is located in your non-primary residence. Thus, personal property in a storage facility, or even in a moving truck or trailer, is not subject to this 10% limit.

With “Coverage C” still in force during your move, many of the possible sources of loss are covered, such as fire, theft, windstorm, etc. If the moving truck overturns, most insurance companies hold that the damage to personal property is the result of the covered vehicle peril. However, some potential causes of loss are unique to moving, such as breakage, marring, scratching, lost items, etc., and it would be advisable for you to discuss these limitation with us and consider the purchase of separate protection from the moving company.

Maintaining personal liability insurance during the transition is probably as important, if not more so, than maintaining personal property coverage. You can either keep the old policy in force until you arrive at your new home (and start new coverage then), or you can have the new policy start as the move begins, and have that policy’s “Coverage E” (liability) apply during the trip and transition.

Since the standard Homeowners policy does not have any territorial limitations, personal property and personal liability coverage apply anywhere in the world. Another reason for you to keep your current policy in force during the transition period of a move out of the USA.

How about your questions? What other insurance topics can we de-mystify for you? Let us know.