There is no specific international insurance you can purchase. Instead, you will need to acquire various types of insurances which cover things like the transport of your belongings, your health, and your new dwelling. This article serves as a guide to the various types of insurance which are recognized internationally.
Do I Really Need Insurance?
The reasons why having international insurance is a necessity any time you either travel, ship your vehicle, or relocate overseas should be easy to decipher. Sending your personal possessions and treasured belongings half way across the world either by air or by sea can go wrong in a multitude of ways. Although it is unlikely, the truth is that crashes among freight carriers is far more common than with passenger planes, and it is not unheard of for rough seas to cause cargo ships to lose part of their precious cargo. Can’t-live-without items can get lost at ports during the transition between international and local carriers; and of course there’s always the possibility that your keepsakes are, through accident or misadventure, irreparably damaged during transit.
The point is, that however unlikely it is that these things could happen to you, is it really worth the risk? Moving to another country is stressful enough. Do you really need the additional burden of having to replace your core set of belongings as well?
The sensible answer is no. Incorporating the cost of international insurance into your budget for moving, or shipping is a necessity. Then the question remains, what type of insurance is out there? What types of insurance do you really need? We will offer up a list of what’s out there, and ultimately the choice is yours.
How Likely is A Mishap?
That depends on how you are sending your items. Air freight and travel by land within the same continent have an incredibly small chance of any of your items not arriving to your destination. In fact, the numbers for air freight are pretty reassuring: something like one in 1.2 million as the chances of an air freight accident. That being said- shipping anything across the ocean comes with a bit more risk.
Unfortunately the exact numbers aren’t out there, but estimates for the number of containers that are lost at sea ranges from around 350-10,000 a year. That sounds incredibly high, but you have to take into account that 90% of the goods in the world are shipped by sea. Millions and millions of containers brave the ocean in a year. With that taken into account, you end up with a odds of around 18,300 to 1 that your 20 foot container will end up in Davey Jone’s locker.
Realistically, the main risk you’re going to face isn’t your items being completely lost. What is much, much more likely to happen is that you get your items and they are damaged by water or mildew, or were tossed around and broken. These are the kinds of issues that make having coverage so incredibly important.
So What Are My Options?
For the most part, any international shipping company worth it’s salt is going to have some kind of international insurance available. You can also opt to go with a third party. Keeping the cost of your insurance down is much like everything else – you should shop around.
Most companies will offer some configuration of the following types of international insurance (names may vary).
- Legal Liability- Much like it is for car insurance, legal liability is the base level of international insurance. It is the industry standard, and should be available from any legitimate international shipping or freight shipping company. Usually, the ocean carrier is responsible for approximately $500 per package (coverage for air shipments is determined by weight). This insurance does not cover partial loss.
- Total Loss- Your entire shipment must be lost, destroyed or damaged for this type of coverage to apply, and does not cover any partial loss or damage. Instead of establishing a cap to the financial liability, this option will keep you completely covered for the declared value of your belongings. This requires a detailed declaration of the value of your shipment, which means a fair amount of legwork upfront — but you then have the peace of mind that you are covered in the case of tragedy. This option can range in cost from 1%-5% of your shipment’s declared value.
- All Risk Cargo Insurance- Although this option is the most expensive, it is also the safest in terms of coverage, and is by far the most highly recommended type of international insurance for international moving, or international car shipping. All risk cargo insurance covers any possible loss or damage during ocean transit. Usually, this includes water or fire damage, theft, partial loss, breakage and more. Additionally, it covers non-delivery of goods and improper stowage by the shipping company. *** Important note: this type of insurance is only available if your items were packed by a professional moving service. If you packed things yourself, then you forfeit the ability to purchase this insurance*** Additionally, when you are calculating the total value of your items, most companies will require that you use the value of the items at their destination; so not what they are worth where you started, but how much they are worth at your destination.
These types of insurance are most often offered as “add on” items in conjunction with your other insurance policy.
- Mold & Mildew- This obliges your movers to replace your furniture if it becomes affected by mold or mildew while in the shipping container.
- Pairs and Sets- If one of your dishes is broken in transit, the movers are obliged to replace the whole set. Likewise for anything else that comes in sets or pairs.
- Mechanical Derangement- This requires the mover to pay for repairs to any electronics that are damaged in transit, or cover a replacement if the item cannot be repaired.
Just like with any other type of contractual agreement, the most important parts of your policy will be in fine print. Any type of insurance policy will come with exclusions. This means that you will have no right to claim compensation should your personal effects were damaged due to these exclusions. There are a few standard exclusions that you are likely to find in most international insurance policies.
- Careless and criminal intention of the insured
- Self packed households – Insufficient or unsuitable packing
- Impact of radioactive explosion, radiation etc.
- War risk, terrorist and unlawful acts, committed on political grounds.
- Shortages of cargo while the container and seals are intact.
- Confiscation, expropriation, arrest, liquidation of insured cargo by order of state authorities.
- Loss or damage caused by perishable goods, acids, paints, aerosols, etc’.
- Mechanical and/or technical breakdown relating to your electrical equipment (unless you purchase an add-on like the one listed above)
- Some types of cargo are excluded as well. These include: Cash in transit, precious metals, financial documents, bank notes, coins, securities, shares, cheques, Cameras, Jewelry.
- Storage cover – some moving insurance policies have a time limit for goods that are being held in a storage facility, and others won’t cover shipments in storage.
- Pairs and sets clause – If part of a matching set (like dining room chairs, or dinner set) is damaged, the insurance company will not pay to replace the whole set even if you can not find a matching piece.
Additional Types of International Insurance to Consider
The insurance we talked about above relates to your items being in transit, which is important, but there are other considerations for which you should account.
- Traveler’s health insurance- Life happens, accidents happen, and nothing feels worse than being in a foreign country and needing medical attention, only to find out your American Health insurance isn’t valid internationally. There are a wide array of companies which provide insurance for those traveling overseas. Even if you only maintain this type of insurance for the first few months of your move while you establish yourself, its important. You just never know.
- International Driver’s Insurance- If you intend to purchase a vehicle or drive overseas, then look into both getting an international driver’s license, and getting insurance to protect yourself and others in the event of an accident.
- International Renter’s Insurance- There are a few companies that offer international renter’s insurance. These policies can cover everything from break ins, to fire, to natural disaster.
Here are some links to visit to gather more information on various types of international insurance.
- International Driver’s Insurance -http://www.dmv.org/insurance/overseas-auto-insurance.php
- For Travel- https://travel.state.gov/content/passports/en/go/health/insurance-providers.html
- UPS Info – https://www.ups.com/media/en/questions_cargo_insurance.pdf
Insurance is a Necessity For International Moving & Shipping
Planning to relocate to another country is a huge undertaking. As much as it may seem like insurance may not be a necessary expense, nothing could be further from the truth. You owe it to yourself to protect your person and your belongings. Inevitably, things happen, accidents happen, and you want to be sure that you are protected.