5 Things You Need to Know About Shipping Insurance
Although shipping carriers do their best to deliver packages on time and in perfect condition, packages can still get damaged or lost in transit, especially when it comes to long-distance international shipping. Luckily, there is shipping insurance, which may reimburse senders whose parcels haven’t reached their destination undamaged or at all. Here are 5 things you need to know about shipping insurance.
What Is Shipping Insurance?
Shipping insurance, or postage insurance, is a type of insurance that covers the cost of lost, stolen or damaged parcels. Even if your shipping carrier of choice is generally reliable, you should consider purchasing insurance when shipping expensive or fragile items, or when shipping long distances.
Who Pays for Shipping Insurance?
Some packages may be covered automatically, i.e. insurance is already included in the shipping cost. For example, most USPS Priority Mail and Priority Mail Express shipments include up to $50 (Priority Mail) or $100 (Priority Mail Express) of insurance. Similarly, each domestic UPS or FedEx parcel is covered up to a value of $100 against damage or loss.
Technically, this automatic coverage is declared value coverage, not insurance. If the value of your package is more than $100 but you haven’t declared it, the carrier’s maximum liability is $100, even though your package is worth more than that.
If you package is expensive or fragile, it makes sense to buy additional insurance. Generally, it is the sender who purchases insurance coverage. However, when it comes to online shopping, many retailers offer shipping insurance to their customers as a paid optional extra. Or, for example, when the recipient purchases a shipping label online to email it to the sender, they can add insurance in the process and pay for shipping and insurance coverage together.
Are There Any Shipping Insurance Pitfalls?
With insurance, you always must read the fine print. For example, you won’t be reimbursed for damaged parcel contents if you fail to pack fragile items properly and label your parcel as fragile. Make sure to check out the carrier’s packing requirements before shipping breakable items.
In addition, some items may be not covered by insurance. Most common non-insurable items include artwork, currency, precious stones, and coins. Each carrier has a unique list of non-insurable items, and you should check it out before shipping anything. Besides, some items, such as antiques, artwork and expensive consumer electronics, may be limited to a maximum declared value. This again depends on the carrier.
How Do You File an Insurance Claim?
If your package is damaged, stolen or lost, you won’t be reimbursed automatically (in fact, in most cases the carrier won’t even know there’s something wrong with your parcel unless you contact them first). To get your insurance money, you have to file a claim with the carrier.
Generally, the sooner you file a claim, the better because most carriers have insurance claim filing deadlines. Depending on the carrier, you should file your claim within six to nine months of the mailing date. If your package is damaged, you can file a claim right away; if you suspect that your package may be lost, you’ll have to wait for some time after the expected delivery date before filing a claim (typically 24 hours to 7 business days, depending on the carrier).
An insurance claim is filed by the policyholder, i.e. the person who has purchased insurance coverage. This is usually the sender, but not necessarily (see above). To support your claim, you should provide documentation, such as proof of insurance, proof of value, proof of loss or damage, a description of the package and its contents. It may be a good idea to take photos of goods and the package before shipping since they may support your damage claim.
Please keep in mind that it may take a while until your case is resolved and you are reimbursed (or not). FedEx and UPS resolve most cases in three to seven business days after receiving supporting documentation. The USPS takes a bit longer, making people wait for up to 30 days.
Can You Buy Third-Party Insurance?
There are third-party insurance companies that offer insurance coverage for parcels, sometimes at discounted rates. Third-party insurance is often cheaper than insurance offered by carriers, plus insurance companies may cover packages with higher declared values than shipping carriers. So if you’re shipping expensive items or just want to cover all the bases, you should consider purchasing third-party insurance. If something happens to your parcel (although we really hope it doesn’t), it might save you time, money and nerve cells.
