Military4Life - Military PCS Reimbursement

PCS Reimbursement Changes - New Legislation

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PCS Reimbursement for Damaged Goods
The 2007 Defense Authorization Act signed by President Bush into law in October 2006, Requires the Department of Defense to provide Full Replacement Value (FRV) reimbursement for household goods lost or damaged in government-ordered moves for military members no later than March 1, 2008. This new standard will replace current depreciation reimbursements from carriers based on the weight of the damaged item, a formula that provides members only a fraction of actual replacement costs. Members whose effects are ruined in a government-required move should not have to pay the cost of replacement.

Under current rules (prior to 2008), if a moving company loses or destroys an item, the amount of loss will be determined by replacement cost based on age depreciation. Most of the time, the depreciation rates were so severe that a servicemember got paid pennies on the dollar for reimbursement. For example, if a television you paid $800 4 years ago was destroyed, the government might depreciate this item at 10 percent per year - meaning the government would reimburse you only 60% of the value or a mere $480 for the damage that the movers inflicted. Additionally, antiques, family heirlooms, and other rare items are not reimbursed at fair value and the servicemember suffers in the loss.

Under the new FRV standard, if a mover lost an item or destroyed an item, the servicemember would get a new one in return. For furniture, appliances, electronics, and more, the carrier will have to replace old items with new ones, complete a full repair of the item if possible, or pay the replacement value in dollars.

This new system is very similar to the extra "optional" FRV coverage that a servicemember could purchase additional coverage. If a servicemember currently (prior to 2008) wants FRV coverage, they must buy the increased coverage from the carrier. The cost is a few hundred dollars on an average military shipment. Currently less than 5% of servicemembers opt for this additional paid coverage. FRV is not even available to OCONUS moves, where more damage is likely due to longer transit, increased handling of goods, and the use of foreign moving companies.

There are additional changes to PCS reimursement. Newly implemented are: a new electronic billing and payment system, customer satisfactions surveys, new contracts with moving companies emphasizing best performance rather than the lowest bidder. There will be a paradigm shift, with servicemembers settling claims directly with the moving company rather than rely on the overburdened military claims offices. Servicemembers will be urged to report on moving companies performance through satisfaction surveys and this feedback will rank the companies and determine which companies will receive the most business.

These are all welcome changes to a current system that treats military servicemembers as second-class citizens. The predominant lowest bidder system has harbored low cost, low quality moving companies that in turn deliver dented, damaged, lost, and destroyed items to military families. And in the end, families are getting paid an average of 65 cents on the dollar in reimbursement. Over one-fifth of military moves result in claims being filed - a number absurdly high.

This new emphasis on quality and full reimbursement is the right way to treat a military family that is moving every few years while fighting for our country. For more lessons learned, tips and advice, check out our comprehensive Military PCS Information section.

Military Pay Questions
Military Pay entitlements change when Service Members deploy. For more Military Pay information check out our Military Pay section. Our Deployment Pay section details entitlements while a servicemember is deployed overseas.

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