Australian Furniture Removers Association advice about insurance when you’re moving home.
In response to inquiries from Move My Home readers, The Australian Furniture Removers Association (AFRA) has issued a statement providing information about the insurance cover offered by its members.
AFRA Executive Director, Viv Hanley says, “Many Australians are under the impression that their property is covered by their home and contents insurance policy when they are moving, or that the removalist’s own insurance should cover any damage. This is not the case in each instance.
“As far as the removalist’s own insurance covering damage, this is simply impossible, as no policy is designed to cover the goods of a third party, unless a full policy document is prepared and accepted by the insurer, and agreed to by the person taking the insurance policy. However, a fully accredited AFRA member, under the Financial Services Reform ACT (FSRA) can sell the correct insurance under licence.”
Mr. Hanley says AFRA Members must have in place policies covering Public Liability, Carriers Liability and Motor Vehicles Third Party Liability in case of potential claims arising from negligence.
“These policies only respond when the removal company has been negligent and they’re deemed to be legally liable to compensate for loss or damage as a result of their negligence. Any claims paid under this basis are limited to the items’ depreciated value, taking into consideration allowances for usage, age, wear and tear.
“It should be stressed that these covers don’t automatically cover customers goods, but if the removal company is considered legally liable for loss or damage, their customers have the security of knowing, when dealing with an AFRA member, that it’s a condition of their membership to have these basic covers.”
The basic cover provided is mainly transit insurance, but the policy can be extended to include periods of storage. Customers using AFRA member removalist can chose either:
Full cover option which includes all risk of loss or damage to the insured goods – or
Restricted cover option which insures loss or damage to goods resulting from specifically nominated perils, i.e. fire, explosion, lightening or flood, and overturning of the conveying vehicle
“Most customers generally select the full cover option as this is the broadest cover, whereas if the client selects the restricted cover option, any claims for loss or damage must be caused by one of the nominated perils,” Mr Hanley says. “In addition to the risk covers options, the client can also select a basis of settlement option. These are:
Replacement cost – in the event of a total loss, subject to the policy terms and conditions, this covers the full replacement cost of the items.
Market value option – in the event of a total loss, this option covers the replacement cost of the items, less a reasonable allowance for age, condition, wear and tear and depreciation.
There are many other policy variables that can be arranged to specifically meet the customer’s needs.”
Mr Hanley says there are no standard premiums as each risk is individually assessed.
Considerations in determining a premium include:
Type of cover option – full or restricted cover
Basis of settlement option – replacement or market value
Type of goods transported – high risk i.e. fragile, breakable, high value items
Distance to be transported
Method of transport – road, rail, sea, air
Packaging, stowing and crating of goods
Value of consignment
Excess applicable to the policy
Extension of cover of policy conditions
Premiums generally range from $18 to $30 per $1,000 for moving goods, with an additional 22 cents to 70 cents per $1,000 for storage per week.
Home movers should note that when supplying insurance, AFRA members must provide the customer with a copy of the Product Disclosure Statement, Insurance Policy wording and a Financial Services Guide.