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What about insuring my goods when I move or putting them in storage?

Most contracts with cartage, removal or storage contractors contain provisions under which the contractor claims to be absolved from whatever common-law liability it may have for loss of or damage to the goods whilst in its possession or under its control and that the owner foregoes any such claim.

The validity or otherwise of such clauses can sometimes be debatable but that question is outside the scope of insurance.

What is within the scope of insurance is that in view of its limitations of liability, the contractor will often include in the contract an option (usually for an extra payment) to have the goods insured whilst in transit or whilst being stored. The idea is that if this option is taken up, then if there is loss of or damage to the goods, a claim can be made against the insurer and the owner of the goods will in that way be compensated for the loss sustained.

However, things are not as simple as they may seem. The first question is "who is in fact the insured under the Policy?" If the answer is that it is the contractor who is the insured, and not the customer, then the customer is not a party to the insurance policy and his/her rights may be limited to requiring the contractor to claim, and if the claim is successful, to pay over the proceeds of the claim when received from the insurer. For various reasons, this is a most unsatisfactory situation for the customer.

Secondly, if the customer is in fact an insured party or a co-insured under the policy, then he / she must appreciate that all the provisions, exceptions, limitations and exclusions in the policy, as well as any excess provisions, apply and may operate to defeat or to reduce the claim.

It is therefore highly desirable (as well as now a legal requirement under the Short-Term Insurance Act of 1998) that the customer be furnished with a copy of the policy and that its limitations and provisions, etc. are clearly understood and appreciated. Merely being supplied with a copy of the policy will not give the customer the knowledge unless it is read and understood clearly. For example, if it is a storage contract, the goods may not be protected by the policy if there is a loss or damage on the way to the depot, or on the way back, or if it is a simple removal contract, may not be covered whilst in storage; there may be limitations on the value of certain items; certain events covering loss (e.g. hijacking) may not be covered. Goods not properly packed or protected may be excluded, etc.

If the customer is unaware of these limitations, then all too frequently he / she is in for a shock when a loss occurs and a claim is made.

So, before you agree to take up the insurance option -