Insurance

Insurance Management

Moving companies and all freight carriers worldwide are obligated to assume basic liability for household goods during a move. This basic liability is either enshrined in law or based on agreements.

Global long-distance freight transport is regulated by international agreements.

Liability limits and regulations vary from country to country. Many countries adhere to international conventions such as the CMR Convention (for road transport) or the Hague-Visby Convention (for sea transport).

For air transport, all countries adhere to the Montreal Convention.

In many cases, the statutory liability is lower than the actual costs, making supplemental insurance essential.

We support you in compiling your insurance list and advise you on how to insure each item most cost-effectively and efficiently.

If you follow your moving company's recommendations and insure everything at its original value at the destination, you'll be in for a shock...

A brief look at liability regulations:

Some countries have their own binding laws governing removal contracts.

In Germany, this basic liability is regulated by the Commercial Code (HGB). The HGB limits this liability to €620.00 per cubic meter. This amount is insufficient in most cases to cover the costs of an average European move.

The entirety of Section 451 of the HGB, "Removal Contract," is dedicated exclusively to removal contracts.

The same applies in Austria. The Austrian Commercial Code (UGB) replaced the former German Commercial Code (HGB) in 2007, which was in force in Austria from 1939 to 2007.

Liability is also limited to €620.00 per cubic meter in Austria.

In Swiss commercial law, the carrier is liable for loss, damage, and delay of goods during transport if the damage occurred while the goods were in their custody. However, liability is often limited by the Swiss Code of Obligations (OR), for example to 8.33 SDR (explanation below) per kilogram of gross weight for damage to the goods, although these legal provisions can be contractually adjusted.

The relevant factor is, of course, the registered office of the company with which you are concluding the contract. If the registered office is in Germany, the German Commercial Code (HGB) applies. If the registered office is in Austria, the Austrian Commercial Code (UGB) applies; in Switzerland, Swiss commercial law applies. If the company is based in another country, other regulations may apply.

Other countries either have their own regulations for removal contracts, or they adhere to conventions such as the CMR Convention or the Hague/Visby Convention.

CMR Convention - Road Freight Transport - Containers are transported exclusively by land.

In Eurasia and its neighbouring countries, road freight transport is regulated by the CMR Convention. CMR is French and stands for: Convention relative au contrat de transport international de Marchandises par Route.

You can view the current CMR member states here.

https://www.tis-gdv.de/tis/transportrelationen/cmr.html

This "International Convention on the Contract for the International Carriage of Goods by Road" dates from 1956 and is valid throughout Europe.

The carrier's liability is governed by the CRM Convention.

Liability based on fault (intent and negligence) is unlimited, while liability independent of fault is limited to a specific value.

In the case of damage to goods, liability is limited to 8.33 SDRs (Special Drawing Rights – in this case, one unit) per kilogram of gross weight (i.e., including packaging).

The SDR (Special Drawing Right) is a reserve asset created by the IMF in 1969 and is part of the currency reserves of IMF member states.

In our liability amount above, this is a unit of account. The SDR is used as a unit of account for international liability claims in air, sea, and land freight, as well as for payments in international postal services.

You can view the current SDR value here:

https://www.imf.org/external/np/fin/data/rms_five.aspx

An extension of liability is possible in exceptional cases if the value of the goods is entered in the bill of lading. This entry will generally also increase the freight costs.

Liability under the CRM Convention generally only covers the current market value. (The decisive factor is the value of the goods at the place and time of their acceptance – Article 23, paragraph 1, CMR).

In most cases, a relocation would be under-insured under a CRM claim.

Hague/Hague-Visby Convention – Sea Transport – Containers are primarily transported by ship.

The Hague Convention dates from 1924 and consists of international regulations for the sea transport of goods. It governs the rights and obligations of shipowners (carriers) and parties involved in the cargo (shippers and consignees), as well as liability for loss of or damage to goods during sea freight.

The Hague Convention (also known as the Hague Rules for maritime freight) excluded liability in cases of fault on the part of the carrier (e.g. navigational errors) and limited it in any case to 100 GB pounds (!? OK, it was 1924, but the value was not officially adjusted).

Here you can view the signatories of the Hague Convention.

https://www.tis-gdv.de/tis/transportrelationen/haager.html

In 1968, the Hague Rules were revised by the Visby Protocol.

The Hague-Visby Rules amended the liability regulations, and from 1979 onward, the maximum liability amounts were specified in SDR units.

According to the Hague Rules, the following applies: 2 SDR per kilogram of goods transported or 666.67 SDR per piece of luggage or unit. The higher value applies. In the case of your move, a piece of luggage would be, for example, a moving box or a piece of furniture.

Special regulations were also established for containerized freight in the context of the containerization of global trade.

Example for maximum liability:

Your move weighs 3,000 kg net and consists of 300 packages.

Based on weight: 2 SDR x 3,000 kg = 6,000 SDR.

Per package: 666.67 SDR x 300 = 200,001 SDR.

The higher amount (200,001 SDR) is considered the maximum liability.

This amount sounds acceptable until you learn that the Visby Protocol did not change the liability system: the carrier is exempt from liability in cases of nautical failure.

Here you can see the signatories of the Hague-Visby Convention.

https://www.tis-gdv.de/tis/transportrelationen/haag_visby.html

There have been further revisions:

The 1992 Hamburg Rules provide a new, comprehensive set of rules for maritime law and finally eliminate the exemption of the carrier from liability in cases of negligence.

Here you can see the signatories of the Hamburg Rules.

https://www.tis-gdv.de/tis/transportrelationen/hamburger.html

The Rotterdam Rules have so far only been signed by Spain, Cameroon, the Democratic Republic of Congo, and Togo, and have not yet entered into force.

The situation remains complex, as there are three groups of signatories (Hague Rules, Hague-Visby Rules, and Hamburg Rules), and some countries, such as Canada and Brazil, have not signed any of the agreements. These countries have their own maritime laws.

Montreal Convention - Air Transport - Your move will be transported by air freight

This convention replaced the old Warsaw Convention in 1999 and has been signed by virtually all states.

This convention applies to all international carriage of passengers, baggage, or cargo by air.

The maximum liability for destruction, loss, or damage to checked baggage is 1,519 SDR per passenger (Article 17, paragraphs 2-4, and Article 22, paragraph 2 of the Montreal Convention). Note: valid from December 28, 2024.

The baggage regulations naturally only allow for very small moves with excess baggage.

The maximum liability for destruction, loss, damage, and delay in the transport of goods is currently 26 SDR per kilogram of the total weight of the directly affected items, according to Articles 18 and 22(3) of the Montreal Convention (Note: Effective December 28, 2024).

Example: Your moving package weighs 300 kg.

26 SDR x 300 kg = 7800 SDR (maximum liability).

Conclusion

In every respect, the statutory basic liability (if it even applies) is only a minimum level of protection. The basic liability for sea and road transport transforms into a "Total Loss Policy" if you handle the packing yourself. Damage is therefore no longer covered.

To fully protect your belongings, it is strongly recommended to take out additional transport insurance, especially for international moves, and particularly if you are transporting valuable items.

You may now understand why transport insurance is relatively expensive.

It is therefore advisable to insure your move in a cost-effective way, so that you are covered without paying the full premium. If you don't have an unlimited moving package, this premium can be prohibitive.

We draw on many years of experience and are happy to advise you on this topic. We know how to insure your household goods safely and adequately without breaking the bank.

Even if you have an unlimited international relocation package from your employer or one with a high fixed allowance, optimization can save you a lot of money that you can then use more effectively elsewhere.