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Written by Consumers Union Southwest Regional Office
Whether moving across town across the state or across the country you will probably find there's too much to do and too little time. By the time you disconnect utilities collect children's school records, complete the change of address forms, and transfer family medical records, you may not want to pack and move your belongings yourself. Moving companies know this, and project an image or smooth, professional efficiency to entice you.
But if you decide to use a moving company to lighten your load and ensure the safety of your possessions, take extra time early on to investigate prices and the company's track record with consumers. Texas consumers report wide variation in service, and bigger is not necessarily better.
In 1995, when the Texas Legislature passed new laws governing household goods movers, Consumers Union Southwest Regional Office (SWRO) advocated for legislation and rules to protect consumers against unfair industry practices and improve the resolution of disputes. The Legislature ultimately adopted a limited form of rate regulationmaximum tariff rates set by the industry and filed with the Texas Department of Transportation (TXDoT)and directed TXDoT to develop consumer protection rules and regulations at least as strong as federal protections for interstate transportation of household goods.1
While Consumers Union predicted that the maximum tariff would encourage collusion but not effectively cap rates, SWRO supported the consumer protections. The Legislature required companies who handle moves between cities in Texas to mediate consumer disputes at no cost to consumers and provide certain information upon request.2 SWRO proposed additional reforms, but many SWRO proposals were not adopted. In particular, SWRO recommended additional information about the value of the insurance consumers buy to protect their goods, and a cap on the total charge a consumer must pay after getting a non-binding estimate.3
For our report we reviewed consumer complaints at TXDoT, reviewed company performance statistics also filed with TXDoT and went through the process of obtaining estimates for a move in order to determine how well existing consumer protection guidelines are working.
The moving business is a $7 billion a year industry in the United States, according to the American Movers Conference. The Southwest Movers Association, an organization representing approximately 300 professional moving companies mostly located in Texas, estimates there are over 1200 professional moving companies operating in the state.4 Eighty-seven movers reporting their customer service performance to TxDoT in 1996 reported more than 47,000 moves.5
According to the most recent financial information available, consumers pay at least $45 million dollars each year to the top ten moving companies for city to city moves within the state of Texas.6
Three different types of companies, subject to different consumer protection laws, move household goods: national van lines, their agents, and local movers.
The national carriers, such as Allied Van Lines, North American Van Lines, and United Van Lines, are primarily regulated by the federal Department of Transportation and usually handle only interstate moves. These companies often own a limited number of trucks and vans, but generally handle scheduling and advertising.7
When you hire a national van line to move your goods intrastate, an independent truck owner or local moving agent will usually show up at the door to actually move you. But, if the national carrier is named on your contract, called the "bill of lading," it assumes responsibility for your household goods and your satisfaction with the move.
If you are moving within Texas, the local company will probably handle your move itself. Agents work under the name of the national van line but are locally owned and operated. The name of the national carrier may appear on the moving truck and the mover's uniforms; however, the national carrier will not be responsible for your move unless their name appears on the bill of lading.8
Finally, there are small local moving companies which may handle only cross-town moves. In the past, these companies were not required to register with TXDoT and were not subject to the department's consumer protection rules applicable to larger moving companies. As a result of legislation passed in 1997, these companies must now register with TXDoT, carry a minimum amount of liability insurance, and are subject to the department's interim consumer protection rules and regulations.9
A newly appointed advisory committee will assist TXDoT with the development of final regulations for these smaller companies in 1998. In addition, the advisory committee is charged with reviewing the consumer protection rules applicable to all movers.
A household goods moving company is not necessarily a better choice for handling your move simply because it is big or affiliated with a national carrier. We examined records available at TXDoT for eighty seven movers and compared several indicators of service which may be of interest to consumers. (See chart of service indicators, p.6.)10 Performance varied considerably from one moving company to another.
Overall, 12 percent of moves result in either a claim or additional charges of at least 10 percent over the estimate. On average, 9 percent of moves resulted in some type of claim. Removing the two best performing large movers, Roadrunner and Hill Grain, 11 percent of moves with the remaining companies resulted in a claim. Mayflower of Texas, Armstrong and Bekins reported that at least one in five customers filed claims with the companies after their move. Some of the largest van lines providing intrastate moves in Texas, including Bekins and North American Van Lines, reported that the final charge exceeded the estimate by more than 10 percent for more than one in ten shipments.
While some of the larger companies like Roadrunner report few post-move claims, several of the smaller Texas companies also had a good track record with their customers.
Although these statistics are self reported and not verified by the state, they are a useful starting point for research when deciding among companies available in your area. TXDoT now maintains these statistics for most larger moving companies but not for the companies that handle only cross town moves. By 1999, such statistics should be available for all moving companies no matter their size or the region where they operate (unless these requirements are eliminated during the current advisory committee process).
Moving is expensive. Before getting an estimate you must decide several things--whether you will pack yourself, whether you will have specialists pack a grandfather clock or piano, whether you will buy additional insurance--and each decision will influence the cost of the move.
The average charge for an interstate move by the American Movers Conference members in 1995 was $3,669. 11 Large moves, moves of a great distance, or moves with specialty items included can cost much more, but consumers who diligently pursue several estimates can find ways to save hundreds of dollars.
We contacted six different moving companies from the yellow pages and asked them to estimate the cost of a household move from Austin to Houston. All of our selected companies were affiliated with a national carrier and two were affiliated with the same carrier (we wanted to see if quotes from different agents for the same van line would vary much). We found that estimates varied considerably, even between the two agents for the same van line, and that quick phone estimates were usually lower than the final estimate after the mover properly examined the goods to be moved.
Initially we made a phone call to each company and obtained a "rough" estimate for only moving, not packing, our household goods. In each instance, we were asked how many bedrooms were in our house and given a quote based on this information. The estimates ranged from $1100 to $2400. Each company stated that they could only give us an accurate estimate by coming out to the home.
There are several different types of estimates offered by most moving companies when they do a walk-through in your home (see sidebar). If you ask for a binding estimate, the final cost for the move is established up front before your goods are loaded.
A variation of this type estimate is the binding "not-to-exceed" estimate which guarantees the price will not exceed the estimate, but if after weighing your items the cost is determined to be less than the estimate, you will be charged the lesser amount or refunded any overpayment. In either case, you will never pay more than the estimate.
A non-binding estimate, on the other hand, is simply an estimate based on an examination of the goods to be moved, but the mover determines the actual cost of the move once the items are loaded on the truck and weighed. The cost can be hundreds or even thousands of dollars more than the original estimate, up to the maximum tariff filed by the mover with TXDoT. When Consumer Reports surveyed its readers in 1990, it found that about half of respondents accepted non-binding estimates.12 Moving companies in Texas are not required to provide a binding estimate, and some offer non-binding estimates only.
Consumers who get non-binding estimates frequently pay more than the company originally bid, and sometimes pay a lot more. Dollens-American, an agent for North American Van Lines of Texas, gave Mr. Soren Marklund of Houston a non-binding estimate of $8905 for his move from Waco to Houston. Upon delivery, the trucker gave him a final bill of $13, 983--half again as much as the original estimate. The company expected him to make the additional payment within the month. Mr. Marklund contacted TXDoT to investigate his options for appealing the large price increase. However, after learning about the cumbersome process, he elected to forego his appeal and simply pay the cost difference.13
TXDoT rules require you to pay only 110 percent of the estimate at the time your goods are delivered, but pay the balance within 30 days of delivery.14 Occasionally, however, the trucker insists on full payment.
Mrs. Ellis of Center received a non-binding estimate of $3892 from American Van Lines, an agent for North American Van Lines, for a move from Center to Richardson. When her goods were delivered the movers told her she must pay an additional $1600 or the movers would not unload her furniture and affects. She was forced to borrow from relatives to pay the balance that day in order to regain possession of her things. "I firmly believe from my experience with North American Van Lines of Longview under the management of J. A. Harlson, that they purposely bid the move low to secure your business and then demand a higher than normal amount to deliver the load," stated Mrs. Ellis in a letter filed with her complaint to TXDoT.15
In general, several of the largest van lines reported that moves in 1996 regularly cost more than the non-binding estimate. Three of these companies, Bekins Moving and Storage Company of Texas, North American Van Lines of Texas, and Watson Van and Storage, all reported that more than one in ten customers had to pay at least ten percent more than the estimate.16
For our estimate, we requested each company provide an estimate for moving and packing our goods and one for only moving the goods. Four of the moving companies offered all three estimate options. The other two moving companies did not offer binding estimates for intra-state moves. We opted for the binding not-to-exceed estimate from the four companies which offered this type estimate.
We found that our two non-binding estimates were $2541 and $2777 and were among the three lowest estimates received. However, we also got competitive bids from companies that gave us binding not-to-exceed estimates. The binding bids for packing and moving our household goods from Austin to Houston varied from $2539 to $4276.
There was also significant variation in estimates for just moving our household goods with no packing. These estimates ranged from $1257 to $2671. For five of the six moving companies these estimates were significantly higher than the amounts given over the phone. One company's walk through estimate was $1300 more than their phone estimate. (See chart of moving comparison estimates)
Finally, we compared each estimate to the maximum tariff companies could legally charge based on the same assumptions used in the bids. The maximum rates applying to most companies (filed by the Southwest Movers Association) result in charges nearly 40 percent higher than the actual estimates given to us by the companies who bid on our move. The maximum tariff rate is the only limit on the additional charges that may be applied when a consumer gets a non-binding estimate.
SWRO predicted in 1995 that this system of rate regulation would not control rates, and recommended instead that the price an individual consumer pays should be capped at 110 percent of a non-binding estimate. Such a ceiling would ensure that the bidding process gave the consumer meaningful price information up front.
Although non-binding estimates remain an uncertain predictor of the final cost, consumers can still save money by taking the bidding process seriously. Seek companies that will provide a binding or binding-not-to-exceed estimate, and use the bidding process to ask questions and solicit advice for more ways to save money.
Unfortunately, there's a good chance that something will be damaged in your move. The consumers most exasperated with their moving company will sometimes file a complaint with TXDoT, and most such complaints involve disputes between consumers and moving companies over damaged goods. Consumers more often complain only to the mover and attempt to settle their complaint directly. Household moving companies are required to report annually the number of shipments they carry where the customer filed a claim. According to these self reported figures, more than one in six Texas customers file claims with some of the largest van lines (see chart).
Ms. Regina Jones Johnson of Houston hired Greater Dallas North American, a company affiliated with Central Transfer and Storage and an agent for North American Van Lines of Texas, to move her goods. After the move, she discovered that many of her belongings had been damaged. Ms. Johnson reported a cracked glass table top, a damaged grandfather clock (which was serviced by the truck driver) scratched and chipped furniture, and damage to her kitchen floor. "I entrusted my household goods to North American Van Lines, Inc. and was assured I would receive a quality relocation," she said in a letter to Greater Dallas North American. "The North American Van Lines pledge of performance made four promises to me in an agreement that I expect to be kept. Therefore, to resolve my concerns and the problems Greater Dallas North American created, I expect your company to investigate what transpired during my move, rectify the issues addressed in this letter, and compensate me for the poor service, lack of cooperation, and damage to my household goods." But, while the estimate was done on North American Van Lines forms, Central Transfer and Storage actually performed the move. She never signed a North American bill of lading, and instead signed only a document from Central. This confusion complicated her case considerably when she filed claims for the damage to her goods. Ms. Johnson participated in the mover's mediation process without a satisfactory outcome and has now requested arbitration through TXDoT, more than a year after her move.17
Mr. Jack Anderson of Lubbock also found damage to items after a move performed by Baker-Duncan Van & Storage, which had been listed in the Yellow Pages as an agent for North American Van Lines of Texas. When Baker-Duncan offered him an unsatisfactory settlement on his claim, Mr. Anderson discovered that the company had closed operations and that North American Van Lines of Texas had severed their relationship with the company. TXDoT officials advised him to accept the settlement offer or take legal action against the old corporation or its directors.18
Even elected officials are not immune from troubled moves. Sherwood Van Lines thought it could earn government contracts by offering to move elected officials and their families to Washington for low prices. But it damaged or lost so many items that the project backfired and the former president was ultimately indicted for illegal campaign contributions.19
Because damage is a common problem, consumers should know who is actually moving the goods. Although the advertisement prominently displays the name of a national van line, the agent is usually going to be your mover for cross town moves or moves between cities in Texas. This means the local agent is assuming liability for your satisfaction with the move and not the national carrier. Before you begin, we recommend asking the agent's account representative which company is responsible for your move. Also, look for the name of the responsible party on all paper work you receive from the moving company including estimate work sheets and, ultimately, the bill of lading authorizing the company to move your goods (see story, p. 11). The Motor Carrier Division of TXDoT will provide you with performance statistics for that agent if they are available.
Requesting an inventory of your items before they are moved is one way to ensure that there is a written record of each item and any preexisting damage. It is important to review the inventory for completeness and accuracy and fully understand any coded information. Mr. Bob Sinclair of Tyler found several pieces of his furniture were damaged during his move. After filing a claim with the moving company, he was told that codes on the inventory showed the items had been damaged before shipping.20
Your rights are determined by an actual contract between you and the moving company. This contract is called the "bill of lading" and most companies use the standard contract filed with TXDoT by the industry association. You have a right to a copy of the bill of lading before the mover starts loading your goods on the truck.21 It is important that you understand and agree with all terms and conditions in the bill of lading, and go over it to be sure it accurately represents the details of the move (see Bill of Lading Article).
Consumers Union SWRO has previously recommended that the bill of lading be clearly identified as a contract and state that it governs the rights and responsibilities of the carrier and shipper in the transaction.
Most people do not expect to lose all their possessions due to an accident while moving, and often purchase just enough insurance coverage to protect against ordinary damage. This coverage amount may be all that is required for most moves. However, total loss of a shipment can occur and consumers should be aware of this risk.
Moving companies generally offer basic minimum coverage and optional insurance. The basic coverage, included at no additional charge, pays 60 cents per pound, per item for damaged or lost goods. While free, this benefit is low. For example, a mover who breaks a lamp weighing 10 pounds and worth $100 pays only $6 for the damage.
Your homeowners insurance policy typically offers some coverage for your possessions during a move.
The standard homeowners insurance policy in Texas provides for coverage at ten percent of the personal property (contents) limit while the property is being transported. The contents limit is usually 40 or 60 percent of your overall coverage limit. So if your house is insured at $150,000 and you have $60,000 in contents coverage (40 percent), you have $6,000 of coverage on the items while they are being moved to your new residence. There is no coverage for household goods that are stored in a location outside of your residence, although people frequently must store their affects for days or even months when juggling the details of a move from one house to another.22
In addition to your homeowners policy, you may purchase additional insurance that pays either the cash value or the replacement cost of your items. You purchase this insurance instead of the basic minimum coverage included in the bill of lading.
A "declared value" policy provides coverage at $1.25 times the total weight of your household goods shipped. The insurance company will pay you their actual cash value (cost less depreciation) up to the maximum coverage on your shipment. To purchase replacement cost protection, you must declare a value for your entire shipment that is greater than $3.50 times the total weight of the goods shipped. You are then reimbursed the full cost to replace or repair any damaged goods up to the amount of coverage you purchased.
While this option seems to provide the most comprehensive coverage for your goods, even it may prove to be insufficient in the event of a total loss if you do not purchase enough coverage. Full coverage against a total loss can be expensive.
We asked each representative about insurance coverage for our household goods during the move. All but one of the moving companies we surveyed offered additional insurance for a fee. (The remaining company left a brochure from an insurance company who could provide additional coverage for our move.) The quotes given us for full replacement cost coverage at $35,000 with no deductible ranged from $195 to $329. In addition to cost variances among moving companies, the policy's deductible amount will also affect the cost of the insurance.
In 1995, Consumers Union Southwest Regional Office advocated unsuccessfully for the strengthening of consumer protections in proposed rules relating to the sale of insurance by household goods carriers. SWRO requested that that TxDoT enter into a memorandum of understanding with the Texas Department of Insurance (TDI) to develop standard policy language for insurance policies sold to shippers and to monitor loss-ratios of these policies. These proposals were not adopted, and neither TxDOT nor TDI today monitor the coverage, the value, or the claims payment record of the insurance policies covering a move.
A loss ratio, the share of your premium dollar spent on claims, is a good measure of the value of an insurance policy. Monitoring loss-ratios would help determine whether the price of this insurance is related to the actual risk of a major loss during a move.
Most consumers do not shop for the insurance coverage for a move. While they may try to find the least expensive moving company, they generally accept the insurance offered as part of that company's bid. For that reason, consumer price concerns exert little direct pressure on the cost of insurance, except that consumers offered an expensive policy may underinsure and hope that nothing goes wrong. If you believe the insurance cost quoted by the moving company is too expensive, we recommend you contact an independent insurance broker for an estimate for insurance coverage.
If a moving company damages your furniture or personal items, you may have to wade through months of complaining, mediating and arbitrating before you finally get a settlement from the company.
When a consumer files a complaint against a moving company with TXDoT, the agency customer service representative is required to advise the shipper that "he or she must attempt to resolve the complaint with the household goods carrier's complaint resolution process before the department will attempt to resolve the shipper's complaint." 23 But, according to the rules and regulations governing household goods carriers, it can take up to 180 days for the claims resolution process to be completed before TXDoT will attempt to resolve the dispute.
The claims resolution process normally requires that the consumer file a written complaint with the moving company. According to company statistics, such complaints are generally resolved in as few as 30 or as many as 120 days depending on the company.24 If the dispute is not resolved within 120 days the consumer can request non-binding mediation at the moving company's expense. (Most members of the Southwest Movers Associations utilize that group's mediation program.) The mediations must be conducted within 60 days of the request. Only if the mediation process is unsuccessful will TXDoT attempt to resolve the dispute. Although the mediation program must be "impartial" under TXDoT rules, the Southwest Movers Association told SWRO that the mediators are usually attorneys recommended by the Association whose fees are paid by the moving company.25
The next step is to participate in non-binding arbitration at TXDoT's expense. If the arbitration process is unsuccessful the consumer may pursue legal action in a court of law. The process appears to be long and cumbersome. Many consumers working through TXDoT expressed frustration at how long the appeal process takes. They sometimes accept a less than satisfactory settlement at the end of the process in order to avoid potentially expensive legal action.
Some of the problems consumers encounter can be avoided if you request the moving company to complete an inventory of your household goods to be moved. Check it carefully to ensure that you are in agreement as to the condition of all the items listed in order to avoid potential disputes regarding damage to your goods. Also, begin the claims process as soon as possible after you detect the damage and place all your claims correspondence in writing to create a record you can rely on later.
2 - Tex. Civ. Stat. Art. 6675c, Sec. 8(f).
3 - Comments of Consumers Union on Regulations Relating to Household Goods Carriers Submitted to the Texas Department of Transportation; October 9, 1995, pp. 5-6.
4 - Interview, Pat King, American Movers Conference, an organization representing 3000 professional moving companies, 10/07/97. Interview, Cheryl Clements, Southwest Movers Association, 09/29/97.
5 - Household Goods Carrier Annual Report to the Texas Department of Transportation for year ending December 31, 1996, for 87 van lines that offer moves between Texas cities and use trucks of at least 26,000 pounds. Companies using smaller trucks or offering services only within a city were not required to report 1996 information.
6 - Before the deregulation of the Texas trucking industry in 1995, the largest professional moving companies that transported household goods intrastate were required to report financial information to the state. This figure represents the total reported household goods revenue for each filing company. Annual Reports filed with Texas Railroad Commission 1994.
7 - Is Big Joe a Good Joe, Consumer Reports, September 1986, p. 566.
8 - The bill of lading is both the receipt for your goods and the contract for their transportation. For more information about this contract, see Your Rights and Responsibilities When You Move, available on the internet at http://www.fhwa.dot.gov/omc/moving.htm, and directly from TXDoT.
9 - HB 1418 by Alexander, 75 th Texas Legislature, 1997. Senate Bill Analysis, C.S.H.B. 1418.
10 - Household Goods Carrier Annual Report to the Texas Department of Transportation for year ending December 31, 1996.
11 - Interview, Pat King, American Movers Conference, 10/07/97.
12 - Surviving Your Next Move, Consumer Reports, August 1990, p. 529.
13 - Consumer Complaint, TXDoT Motor Carrier Division, received 7/1/97.
14 - TXDoT Motor Carrier Emergency Rules and Regulations, Sec. 18.54(a)(3), Effective September 1, 1997.
15 - Consumer Complaint, TXDoT Motor Carrier Division, received 01/16/97.
16 - Companies are not required to report all moves that cost more than originally estimated, only those that cost at least 10% more. TXDoT Motor Carrier Emergency Rules and Regulations, Sec. 18.61, Reporting Requirements, Effective September 1, 1997.
17 - Consumer Complaint ,TXDoT Motor Carrier Division, 1997. Confirmed with consumer 11/13/97.
18- Consumer Complaint, TXDoT Motor Carrier Division, received 4/09/97.
19 - Newsweek, October 31, 1994, p. 32.
20- Consumer Complaint ,TXDoT Motor Carrier Division, April 7, 1997.
21- TXDoT Motor Carrier Emergency Rules and Regulations, Sec. 18.54(c), Effective September 1, 1997.
22 - The Texas Legislature recently deregulated homeowners insurance policies. While most people today still have the standard policy approved by the Department of Insurance, overtime these may be replaced. You will need to read your homeowners policy to determine the level of coverage for household goods during a move. TX Standard Homeowners Policy, Section I-Property Coverage, Extensions of Coverage.
23 - TXDoT Motor Carrier Emergency Rules and Regulations, Sec. 18.60(b)(3), Effective September 1, 1997.
24 - Household Goods Carrier Annual Report to the Texas Department of Transportation for year ending December 31, 1996.
25 - Interview, Cheryl Clements, Southwest Movers Association, 11/3/97.
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