Should Removals Insurance be Mandatory?

Should Removals Insurance be Mandatory?

In the UK removals industry, the majority of movers offer removals insurance as an option. The standard practice is to inform the customer that the alternative to removals insurance is a limited liability of (usually) £40.00 per item. This can often be enough to convince the customer that removals insurance is worth having.

This system has worked well for a long time, but it may be ready for change.

In the July issue of The Mover, Joe Warren offers up the question, “Is £40.00 enough?” in which he considers the effectiveness of limited liability as fair compensation.

So, the article “Is £40.00 enough?” is not only about the amount of money offered but it also explores the effectiveness of limited liability.

It is hard to imagine a customer being satisfied with a payout of £40, or even £140 as compensation for the loss of an item worth over £500, but such items are commonplace on removal jobs.

The probability of expensive and time-consuming lawsuits is likely to grow as the difference between the value of household items and the amount offered under limited liability increases.

So, what are the options?

The first option is to increase the figure from £40 to something more realistic. Let’s assume we doubled it to £80. Apart from the inevitable increase in insurance premiums (ask your broker), this would do little to reduce potential lawsuits.

When commonplace items like game consoles and 40-inch TVs cost hundreds of pounds, very few customers would be satisfied with £80 per item.

Probably the biggest argument against increasing from £40 per item is the issue of proportionality. The cost of a local UK move hasn’t changed much in the last 15 years, so if the increase was proportional it would likely be only a couple of pounds. Though this would be proportionate to the income of the mover, it would be incredibly disproportionate to the average value of household goods.

The second option is to make removals insurance mandatory on all jobs.

One reasonable argument against this idea is that there are customers that are willing to forego full insurance in order to keep the costs down, and someone needs to provide a service to those customers.

If several small movers are competing for the same customer, then a cheaper option might help to secure the job. The problem of competing on price has always plagued the industry and there are many opinions on the subject, but we should consider the implications.

If a job is secured on the basis that the price is low and with only limited liability, but the customer takes action because they were only offered £40 for £250 of damage, was the job worth taking? Even if they fail to win in court, the reputational damage on social media and review sites could be devastating.

AIM has no plan to change the membership criteria to insist members provide full insurance on all moves, but we do think it is a conversation that we need to have, not just among our members, but throughout the UK removals industry.

 

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COVID-19 Statement

Although there is no rule to prevent them from doing so, not all removals businesses are working during the Coronavirus measures advised by the Government.

Those that are working have been provided with clear guidelines by the Government and supported by AIM, with safe working procedures, specific documents and frequent information updates.

Removals firms

Removal firms are able to operate and should follow the latest government guidance on safer working. Where moves are carried out, social distancing should be followed.
Companies should ensure employees understand how to operate safely and communicate this to customers.

  • Removers should contact the household in advance to check that no member of the household is showing symptoms of coronavirus or self-isolating. If they are, works should be delayed.
  • They should also encourage households to ensure all internal doors are open and surfaces and possessions have been cleaned with household cleaning products prior to them entering the property.
  • No work should be carried out by a person who has coronavirus symptoms, however mild.
  • Removers should wash their hands on entering the property using separate towels of paper towels which need to be washed or disposed of safely after use.
  • Removers should seek to minimise contact with homeowners and remain 2 metres apart from householders at all times.
  • Removers should implement a buddy system and ensure that the same people work together when moving bulky items and furniture.
  • Removers should bring their own refreshments but you should ensure they have access to hand washing facilities, using separate towels or paper towels if possible,
    which should be washed or disposed of safely afterwards.

https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak