Is package insurance worth the extra cost?
This is a common question with a complex answer.
Although a shocking statistic reveals that 26 million Americans have had holiday packages stolen from their doorsteps in 2017. This disturbing bit of information is bound to get you wondering, is shipping insurance worth it after all?
If you’re shipping a valuable item, you should consider these 5 points about package insurance.
Is Package Insurance Worth It?
When talking about whether to insure packages, there are a number of factors to take into account. Keep reading to find out the five key points about package insurance.
First things first.
The two main factors to take into consideration when it comes to deciding on postal insurance are item type and destination. These two factors will help the sender to establish the risk involved in the process. Knowing these factors will also help to mitigate the risk as much as possible.
The type of item is a central part of establishing the potential risk, as there are certain kinds of items that are more likely to be stolen.
These are the items that can be easily pawned or resold. They include good quality brand names and easy-to-carry, more compact boxes. Branded boxes or any boxes indicating what is inside are therefore a bad idea.
However, it’s never certain that an unbranded item won’t be stolen. Any small items with a high value should be insured to avoid risk.
The reality is that some areas are simply riskier when it comes to damage and theft than others. It’s unfortunate but areas in the US vary widely in terms of risk. The general best practice is, therefore, to insure most packages, especially for international orders where risk automatically increases.
Both tracking and signature requirements may minimize risk. However, even in situations like this, coverage limits will be imposed by trackers. In addition, keep in mind that most third-party insurers will require a general level of trackability to insure your package.
Ok, so this point is a little different from the rest.
All domestic UPS and FedEx parcels are automatically covered up to a value of $100. This is cover against damage or loss.
The U.S. Postal Service, however, only provides an automatic $100 of coverage on Express Mail.
Remember that all the carriers are offering is declared value coverage and not insurance. Declared value on goods represents the carrier’s maximum liability for that package in the event of damage or loss.
What this means is that you have to declare the value of your goods if they’re worth more than $100. If you fail to do this, the carrier’s maximum liability is $100, even if the parcel is worth $1,000.
Importantly, if you want extra protection for your shipment, you’ll have to pay for it. Extra coverage is highly recommended in some cases.
Read the Fine Print
This one in NB to say the least.
Always remember to read the small print before shipping a parcel.
It’s simply essential to know exactly what coverage you’re getting for your money. UPS has different policies to other companies, for example. UPS doesn’t cover precious stones, coins, or cash. FedEx and USPS have similar exclusions but no two companies are exactly the same.
In addition, different carriers cover different areas. When shipping internationally, ensure that you know which destinations are covered and which aren’t.
The declared value of items will also be subject to specific limits, depending on the carrier. For example, FedEx limits the declared value of antiques, plasma TVs and artwork to $1,000. Do your research, as declared values will range.
Another tricky area is packing requirements. In general, carriers will refuse to cover items that aren’t properly packaged. Look out for the packing requirements in the fine print and follow them carefully. Popping a delicate vase in a plastic bag is a bad idea for many reasons.
If there’s only one fact you remember from this article, make it this one. Any file you claim will require supporting documents. These will ensure you can prove the value of the goods, and show exactly what it is you’ve shipped. Without documentation, you simply won’t be able to follow the due process.
It’s also a pretty good idea to keep proper documentation of the parcel at the start and end of its journey. Along with this, a series of pictures of the actual item is helpful for keeping track of its starting and ending condition.
An example of this is that when you file with USPS, you’ll need to show evidence of insurance, evidence of the value, completed claim form, and proof of loss of contents or damage.
In some cases, a repair estimate is even required. Remember that if something can be repaired, you won’t receive the full amount of the value of the item.
A Waiting Game
Keep in mind that the whole process takes a while.
Carriers differ in their response times. However, you’re usually dealing with a massive company that gets many queries daily.
Different carriers follow different protocols for issues like lost packages. FedEx states that most cases are resolved in five to seven days documentation is received. The USPS allows itself more time and says that claims are typically paid within 30 days.
The process for a UPS lost-package claim begins as soon as the package is reported missing. The carrier then searches for the package, which is states takes up to 10 working days.
If they fail to locate your package, you’ll be sent a letter authorizing the claim. This is when your documentation is sent in. UPS states that, when the documentation is received, the process should unfold pretty quickly. This can happen in as little as three days.
The Next Steps
After reading this article, it’s pretty clear that when talking about shipping and insurance, it’s helpful to do your homework.
There are simply too many risks involved in the shipping process to skimp on insurance. When deciding on package insurance, it’s essential that you find a company you can trust.
So, what are the next steps?
For more information about shipping insurance, please contact us. We’re more than happy to guide you through the options until you find one best for your needs.