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Why Is Insuring Your Household Articles Important During Transit?

Relocating to a new city due to a new job opportunity is exciting. This is because, with betterment in your job profile, you meet new people, learn a new culture, and last, but not the least explore a new city. Despite being rewarding and exciting, home relocation needs a lot of preparation and wants you to undergo a certain level of pain. You need to do a good level of research to find out suitable and right movers and packers that can help you to relocate to a new city with ease.

However, even if you have hired the most professional movers and packers for safely relocating your valuable household articles, then too they are exposed to damage, accidents, and theft. All these unfortunate happenings warn you to opt for the most suitable transit insurance policy for a home relocation.

Many of us think that our household articles are safe as our movers and packers have promised to deliver our things safely. This is exactly the moment where we have mistaken as none of the packers and movers and transport companies provide coverage for transit damages. The truth here is, most of them charge us an illegal fee of approximately around 3% of the declared value of our articles while a transit insurance policy's premium can range between 0.9% to 1.4%.

What is Transit Insurance Policy?

Transit insurance is designed to provide coverage against different transit risks such as accidents, fire, theft, or damage because of natural calamity. Most of the time, packers and movers give transit insurance that provides coverage of your household articles such as furniture and home appliances against damage due to transit or storage. The premium of this insurance policy provided by the packers and movers is as per the value of the goods you have declared and the amount of risk that you can bear for your goods that are in transit. This type of insurance policy may or may not provide coverage related to handling aspects of the articles while unloading or loading or for the household articles that are in storage. 

However, on the other hand, a transit insurance policy provides cover against the financial losses related to your household articles while they are in transit.

Diversely a transit insurance policy is known as Single Voyage Policy or Marine Inland Transit Policy that offers two types of covers.

  • Inland Transit (Road or Rail) A: It is an all-risk cover policy.
  • Inland Transit (Road and Rail) B: It provides basic cover for some restricted risks.

These policies do not provide coverage for any oceangoing voyage.

Importance of Insuring Household Articles During Transit:

The reasons for or importance of insuring your valuable household items while relocating to a new place are mentioned below:

It is a policy of ‘Short Duration’-

A transit insurance policy is a short duration policy wherein the coverage starts from the time your goods leave the place that is mentioned in the policy to the outset for the transit and continues until the normal course of transit, which includes customary transshipment if occur any until the item is delivered to the final destination or warehouse that is mentioned in the policy. So, we can easily avail of this policy while shifting our household items. 

For instance, suppose you like to send a consignment valued Rs.25 lakhs from Mumbai to Chennai. The premium that you have to pay for basic cover will be approximately Rs.3, 200 and if you add cover for flood, strike, civil commotion, and riots, then you may have to pay approximately Rs.600 extra for the same. 

While policy A provides coverage for all risks as its name suggests. Its standard exclusions are damage or loss or expenses because of the wilful misconduct of the ordinary leakage, assured, ordinary loss in volume or weight, or ordinary wear and tear of the insured, because of unsuitability or insufficiency of preparation or packing of the insured goods, proximately because of delay even though this delay be because of risking the insured against or it can be because of inherent nature or vice of the subject matter of the insured. 

In addition to this, the damage or loss caused because of civil war, war, rebellion, revolution, civil or insurrection strife arising from or some hostile act by or against a belligerent capture, power, arrest, seizures, detainment or restraint or attempts for these and their results, derelict mines, bombs, torpedoes, or other derelict war’s weapons. 

The set of these exclusions are known as Strike, Riot, and Civil Commotion (SRCC) exclusions. However, these exclusions can be covered by paying an extra premium. 

Policy B on the other hand provides cover specifically against damage, loss, or expenses that are caused because of lightning, fire, collision, breakage of bridges by or with the carrying vehicle, derailment, overturning of the vehicle carrying the goods, or such similar accidents to the carrying vehicle or wagon of railways. 

A similar set of exclusions and SRCC covers are applied and are available as per an opt-in basis. 

The Final Words!

As per the insurance policy, you being insured, have to make all the necessary efforts to minimize your losses and hence help the transit insurance company to pursue any reimbursements or recoveries of your losses. Generally, there is an excess of approximately 0.50% or a minimum of Rs.5, 000 on each claim you make.  

The reason for the same is clear which is at least you can purchase a new Television if your old TV is damaged during transit.  

Written By: PolicyBazaar - Updated: 11 December 2020