What Insurance Your Shipment to Australia Qualifies for and How Cost Is Determined
It is essential you understand what insurance your shipment qualifies for and how the cost is determined for replacing or repairing any damaged items.
Many shipping companies will try and upsell you on the insurance that your shipment does not qualify for. This is why finding an experienced international shipping company that is familiar with Australian relocations is so important. Unfortunately, you will not find out if your insurance actually covers your shipment until you need it.
The Type of Insurance Is Dependent on Who is Doing the Packing.
Full Pack and “All Risk” Insurance
Full pack service is when the movers show up at your house and pack all your boxes for you and wrap all your furniture for shipment. They also keep a detailed packing inventory and label all the boxes for customs and quarantine inspections in Australia.
One advantage to having full pack service is only specific boxes are flagged by customs and quarantine if the international shipping company you choose has an excellent reputation and is well known by Australian Customs and quarantine for shipping personal items to Australia. These companies usually also have a long-standing partnership with an equally reputable shipping company in Australia that is receiving your shipment.
Another advantage to full pack service is you qualify for “All Risk” insurance. (Some international shipping companies may refer to “All Risk” insurance as Coverage or Valuation of your shipment.)
With “All Risk” insurance you have a limited period after your delivery date to go through your shipment and file a claim for any breakage, missing or damage to your belongings that have happened during packing, shipping or delivery. Ordinarily, you can only submit one insurance claim to recover damages per shipment.
A few important things to be aware of when access your shipment value for “All Risk” insurance.
The value for insurance purposes of your household items is the value of replacement or repair in the destination country.
For example, if you have a dish set that you want to insure. You will need to go online and look for an equivalent that is available for purchase in Australia. You might find that the cost of a replacement in Australia is more than the cost of a replacement back home.
Does that make sense?
What’s important here is to realize that it isn’t a simple currency conversion since you are going to have to find a replacement in Australia.
Don’t forget the cost of shipping of the item when determining the replacement value. You will have already paid to have the items shipped and delivered even if they did arrive damaged.
One mistake people make with “All Risk” insurance is to under-insure specific items.
For example, you have an antique china cabinet that has been in your family for generations and you want to ensure its safe arrival.
An appraiser comes to the house and estimates the value of the china cabinet at USD 4,000. You have found something similar online in Sydney that is AUD 8,000. Adding on the cost of shipping (no depreciation value this time), you decide to insure it for a replacement value of AUD 8,500.
But, when going over the extra cost of “All Risk” insurance, you choose to save some money and ensure the cabinet for 50% of the value in Australia, AUD 4,250.
Things go badly with the delivery of your shipment, and the leaded glass doors of your china cabinet are broken and must be replaced entirely. You find someone in Sydney that is qualified to do the work, but it’s going to cost you AUD 1,000 for the repairs. Unfortunately, you have only insured the cabinet for 50% of its replacement value. Therefore, you only receive AUD 500 towards the cost of repairs.
Partial Pack and Self Load Only Qualify for “Total Loss” Insurance
We, like most people shipping their household to Australia, chose to “partially pack” our shipment.
In our case, partial pack meant we would pack up everything that could fit in a box then movers would wrap all the furniture and odd bits at the time they picked up our boxes. The movers would also pack the shipping container when the time came.
Self Load is when you not only pack up your household, but you also pack up the shipping container.
In each of these cases, you only qualify for “Total Loss” insurance which is pretty much what it sounds like.
You will not be able to claim any breakage or repairs to damaged items. The only time you can make an insurance claim is if your entire shipment is lost, as in the boat sinks and nothing can be recovered.
We decided to go with partial pack services because we wanted to save money.
The truth is, depending on how much you are shipping, full packing service may not be as expensive as you would think. I now wish we had gotten a quote for both before making our final decision.
When you factor in the time it takes to pack, Australian customs and quarantine inspections, and the packing supplies we had to buy, it just may have worked out to be a little more expensive and worth it.
Something to think about when you get your moving quote.
Note: All boxes in your shipment must be new and not previously used. They must also be clearly labeled as to what is in them.
Don’t forget about the detailed packing inventory list.
Be sure to label all boxes not just with what is in them but with the number that corresponds to the same number on your packing inventory list. The inventory list is how customs, quarantine, and the movers delivering your shipment will be able to see that you have x number of boxes, and what is in each specific box. Your packing inventory list will be the primary checklist for your shipment. If customs sees that you have x number of boxes listed on your inventory list, but they count x+1 boxes then you have a problem and your inspections, both customs, and quarantine, will take longer and cost more.
Knowing what type of insurance your shipment to Australia qualifies for before getting your moving quote is important so that the movers are not able to upsell you “All Risk” insurance for a partial pack shipment.
Ready to Get Started with Your Move to Australia?
Australia Moving Checklist
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Lock-In Your Exchange Rate
Did you know the Australian dollar is a commodity currency? This means the value of the Australian dollar is linked to the price of iron ore and other Australian exports. It also means that it's HIGHLY VOLATILE! When a good rate comes along, you need to be ready to jump on it and lock-in that exchange rate.
Have You Started Packing Yet?
No, not yet? Still got several months to go? Ok, but have you at least started thinking about what you're taking? Maybe even started a list? The truth is you don’t need to know what's going with you before getting your shipping quote. Why? Scheduling a shipment to Australia can take as long as 6 months.
Open Your Bank Account
In 5 minutes or less, you can open both a checking and savings account BEFORE you move to Australia. There are only 3 things you need to get started.
1. Your passport and visa details.
2. Know where you're going to live.
3. Be arriving within the next 3 months.
*This link will take you to Commonwealth Bank of Australia's special accounts for newly arriving expats and migrants. Commonwealth Bank is a sponsoring partner of Sydney Moving Guide.