Insurance requirements for moving companies emanate from federal and state regulations. The laws help ensure that moving companies have the financial responsibility to transport the goods of consumers. The federal laws pertain to moving companies that travel between states. Depending on where the movers operate, they may have to carry general liability insurance, cargo coverage and/or workers compensation
Generally, moving companies have exposure to two categories of risk: property damage of assets the company owns and bodily injury and/or property damage of other's assets. If movers had to pay off large claims, that could place financial strain on them.
Moving companies must comply with federal and state laws concerning the moving industry. The Federal Motor Carrier Safety Administration (FMCSA), which operates under the U.S. Department of Transportation (DOT), has primary regulatory authority to regulate the interstate moving industry. In addition, state and local governments enact their own statutes to supervise this activity.
Moving companies may offer their customers two choices of liability coverage options for valuation coverage--full value protection or released liability. Full protection makes the moving firm totally liable for the replacement value of damaged or lost property for 100 percent of the shipment. The consumer must pay for this insurance and can reduce the cost with various levels of deductibles.
Released value coverage means that when property is damaged or destroyed, the moving firm can do one of three things to make good: repair the item; replace it with a like good or make a cash settlement for the product’s cost or the present market value to replace the item. The basis cost of the move usually includes released value coverage. Consumers who select released value coverage may purchase additional liability coverage for their goods. The mover still has liability for the basic coverage
State and Local Regulations
Each state/county has its own insurance requirements for movers. In Miami-Dade County, moving companies must submit a certificate of insurance as proof of general liability insurance coverage. California regulations state that all moving companies must provide proof of cargo insurance for at least $20,000 per shipment. In addition, the carrier must have liability insurance coverage. California movers who hire subcontractors or lease the vehicles of their employees must also purchase and file a $15,000 bond with the Insurance Commission.