STB Revises Ruling on Consumer Options When Movers Damage Goods in Transit

This story appears in the Jan. 23 print edition of Transport Topics.

The Surface Transportation Board has revised a year-old decision that was meant to enhance consumer awareness of damage-protection options when they use household goods carriers.

In its ruling dated Jan. 12, the agency said consumers should have additional time to decide between two choices for insuring their household goods while in transit. In addition, STB raised the minimum dollar amounts of liability coverage for fully insured shipments.

Last year, STB ordered movers to include details about the two choices for liability coverage on a cost estimate form, which customers receive when they initially contact a mover.

STB’s new, 16-page ruling adopted the view of the American Moving and Storage Association that it was better to give consumers more time to decide which type of liability coverage to select. The details of the coverage choices now will be shown on the bill of lading, the last document issued before the shipment moves.

One coverage choice is for consumers to pay an additional fee based on the shipment’s value, to obtain full replacement cost if goods are damaged. The other option is for consumers to accept a lower level of protection, called “released rates,” equal to 60 cents per pound without paying any additional charge.

“The changes will reduce shipper confusion over liability limits, and consumers will be afforded an enhanced protection level,” said Linda Bauer Darr, the CEO of the movers’ group. “Our industry will benefit from simplified paperwork and a more straightforward valuation declaration process.”

STB’s decision last year was meant to give consumers more information about the moving process, particularly the two choices for liability coverage for goods that are damaged in transit.

STB’s new minimum coverage when consumers select the full replacement cost option is $6,000, or $6 per pound, whichever is higher.

The old limits were $5,000 or $4 per pound, respectively.

The board also decided to allow movers to offer a range of deductible amounts for household goods shipments that are moved under the full-value option.

STB reasoned that a range of deductible amounts would be simple for consumers to understand because of similar options in their car or home insurance.

Moving industry consultant Joseph Harrison, a former head of the trade association, asked STB not to increase the minimum coverage now.

He said that shouldn’t be done until the Federal Motor Carrier Safety Administration’s “Know Your Rights” document that movers give to all customers also was changed to reflect the new limits.

STB disagreed, saying the agency didn’t have the “authority to authorize a deviation from a regulation by another agency.” Instead, STB said the movers should request that FMCSA change and update the valuation levels in its brochure.

The deductibles previously were limited to either $250 or $500 per shipment.

In addition, the agency said that freight forwarders that arrange domestic household goods shipments for consumers that move solely by truck must follow the agency’s rules and advise the consumer about liability options as if the forwarder were a trucker.

On the other hand, household goods moves arranged by forwarders between the continental U.S. and Hawaii, Alaska and other countries are covered by a different set of liability requirements because those shipments are regulated by the Federal Maritime Commission, STB said.

The agency began its review of household goods carriers’ activities at the direction of Congress, which told STB there were chronic consumer complaints about inadequate compensation when movers damage consumers’ household goods.