Moving Company License and Insurance: The Basics

Licensing is the part of starting a moving company that confuses owners most, because the rules change depending on where you are and where you move people. This guide covers the basics. It is not legal advice: rules vary by state, and they change. Check with your state's regulator before your first paid move, and with the FMCSA before any interstate move.

Local moves: state rules

For moves that start and end inside one state, your state sets the rules. They vary a lot:

• Some states license household goods movers through a state agency, often the department of transportation or the public utilities commission. They may require an application, proof of insurance, a tariff or rate filing, and a state number on your truck
• Some states have no special mover license and only require a general business registration
• Some cities and counties add their own business license on top

Search for your state's household goods mover rules, or call the state department of transportation and ask: "What do I need to move household goods for hire inside the state?"

Interstate moves: federal rules

If you cross a state line with a customer's goods, even for a short trip, federal rules apply. Before your first interstate move you need:

• A USDOT number from the FMCSA
• Operating authority (an MC number) as a household goods carrier
• Proof of insurance on file
• Federal paperwork for every move, including the rights and responsibilities information customers must receive

Many small local movers simply do not do interstate moves at first. If you ever plan to, start the FMCSA registration early, since it takes time.

Insurance every mover should carry

• General liability: damage to the customer's home, like a scraped wall or a broken banister
• Commercial auto: your truck on the road. Personal auto policies do not cover business use
• Cargo or motor truck cargo coverage: the customer's belongings while they are in your truck and your care
• Workers' compensation: required in most states once you have employees, and moving is a high injury job
• Umbrella coverage: extra protection above the other policies as you grow

Many apartment buildings and condos ask for a certificate of insurance before you can use the elevator or loading dock. Your agent can send one, usually within a day.

Valuation is not insurance

Movers usually offer customers a level of liability for their goods, called valuation. Interstate movers must offer specific options under federal rules, including a basic released value, commonly 60 cents per pound per item, and full value protection. Many states have similar rules for local moves. Explain your valuation options in writing before the move, and make sure your cargo coverage backs up what you promise.

Building and HOA rules

Apartment buildings, condos and gated communities often have their own rules for movers: elevator reservations, moving hours, floor and wall protection, and proof of insurance. Ask the customer to check with their building at booking time, not on moving day. A crew turned away at the loading dock costs everyone a day.

Paperwork for every move

Even where your state does not require it, give every customer:

• A written estimate with your hourly rates, minimum and what counts as billable time
• Your deposit and cancellation policy
• Your valuation terms
• A final bill with actual hours

Clear paperwork prevents most disputes and most bad reviews. Read moving deposits and cancellations for wording.

Keep your numbers on the truck and website

If your state or the FMCSA gives you a number, show it on your truck and your website. Customers and apartment managers look for it, and it is often required.

Workers on your crew

Moving is physical work, and how you pay your crew matters. Many states treat movers who work your schedule, with your truck and your gear, as employees, not contractors. That brings payroll taxes and workers' comp. Get advice from an accountant in your state before you pay anyone as a contractor; fixing it later is expensive.

Where to start

1. Register the business and get an EIN
2. Check your state's household goods mover rules
3. Get insurance quotes for all five coverages
4. Write your estimate, deposit and valuation paperwork
5. Only then book paid moves

Our guide on how to start a moving company puts these steps in order with the rest of the setup.