Tuesday, 15 March 2011

The Cost of Insurance

We are now well into the preparatory work for moving our possessions into storage.  All we are waiting on is a 3rd quotation for the packing and movement of our effects to Coffs Harbour and we will then be able to decide on the preferred removalist.

Each removalist has asked if we want insurance coverage for the move and would we like our house cleaned after the packing.  We’re reasonably experienced at moving.  This will be our 19th move!  Whilst I appreciate the removalists attempt to “add value” to the quotation (at our expense) we always clean the house before leaving.  It’s a cheaper option and we do a better job!

The insurance option was more interesting.  Everything is based on a percentage of the value of the item and the percentage varies depending upon the type of item. General items 3.3%, electrical 5.5%, high value 8.8%, etc.  I had already prepared an inventory in Excel so it wasn’t too hard to create a category code against each item and add a short formula to calculate the insurance premium.  I was astonished to discover the total cost of the premium exceeded $4000.  Particularly when the actual cost of the move is slightly less than $7000.

The majority of our possessions are going into private storage for 5 years, which means there will not be an opportunity to check them for damage after the move to Coffs Harbour.  I can’t see the insurance company accepting a claim 5 years after the event.  Effectively this means we are only able to insure everything for total loss during the move from Adelaide to Coffs Harbour. 

In Australia, the liability associated with the transportation of goods rests with the consignor.  Transport companies are not “common carriers” and cannot be held accountable for damage or loss during carriage.  Consignors either take the risk or arrange their own insurance.  We don’t want to take the risk!

The container will travel the majority of the distance by rail and occasionally there is a major derailment.  So we really only have to insure everything for total loss.

Looks like I need to start contacting some insurance companies to see what coverage they can provide and; more importantly; the premium! 


Brian and Diana on NB Harnser http://nbharnser.blogspot.com said...

In the UK there have been problems with insurance of items in storage, surprisingly the storage company are not responsible and its down to the owner of the goods to insure them, a lot of people were unaware of this and have lost out badly. I don't know the situation over there?

Tom and Jan said...

Hi Brian & Diana,
I'm almost certain it's a similar situation here. Probably buried in the fine print! I can understand the position. How would the owner of the facility know the real value of the contents. Also, by avoiding the liability the facility owner can reduce their overheads.