• Global Mobility: What’s the Deal with Replacement Value Protection?


    It is not unusual to hear about unpleasant moves; damage or loss is par for the course. Not to worry though, the moving industry has your back… sort of.

    In Canada, the loss/damage protection included in the price of shipping is generally limited to a minimum legislated amount set under provincial conditions of carriage regulations. Called “Released Value Protection”, it requires moving companies to cover $0.60 per pound ($1.32 per kilogram) per article of household goods. This means that if a chest of drawers weighing 100 lbs. is damaged beyond repair during shipping, the owner would receive $60 (100 lbs. x $0.60), regardless of the item’s actual replacement value. Clearly, this is insufficient for most individuals.

    Moving companies are well-aware of the risks associated with their service and typically offer additional coverage (Replacement Value Protection-RVP) for purchase over and above the quoted price of shipping. The cost is not insignificant, between $100 and $500 for domestic moves, depending on the size and value of the shipment. For international moves, the cost is double and sometimes triple what is charged domestically.

    Everyone understands that events beyond the mover’s control can impact shipping, but they appear to have factored into the cost of the RVP a higher than reasonable assumption that claims of this sort will have to be paid. Damage or loss occurs quite frequently; in approximately 35% of all moves. This customer-funded protection seems to be designed in large part to cover mistakes, inadequate service, or incompetence.

    Home insurance is purchased to cover damages incurred during unexpected events such as fires or floods. On the other hand, if a window installer drops and shatters a window, the business assumes the cost of the replacement; you did not have to pay an extra fee in case that or some other mistake happened. Protection should be purchased for the out of the ordinary, not for what is a relatively frequent occurrence. Is it the client’s responsibility to pay for the movers’ lack of quality control?

    The moving industry’s reputation could stand a lift. Movers are regularly the top target of complaints in the post-relocation satisfaction surveys we conduct for clients. It would help if moving companies took full responsibility for errors, as do most other service-based businesses. This would force them to focus on improving service.

    Unexpected events happen, and it is reasonable to factor this into the price of shipping, but losses or damages (i.e., dropped boxes, broken furniture, and cracked mirrors, etc.) that occur during a normal “by the book” move should not be the client’s problem.