Sender’s Must-Read | Is Shipping Insurance Necessary? | ShipSaving
ShipSaving Is shipping insurance necessary? - Sender's Must-Read
Discuss the importance of transportation insurance and its key role in protecting goods from loss and risk.
Online shopping has gradually become a habit, and more and more people tend to buy things online, so mailing packages is essential throughout the transportation process. It is very common for packages to be damaged or lost during transportation. 49 million Americans have experienced lost or stolen packages in the past 12 months. If your package is of high value, purchasing transportation insurance is a good choice.
What is transportation insurance?
If your package is damaged, lost, or does not safely arrive at its destination for various reasons during transportation, transportation insurance can compensate for the total value of your package and shipping costs.
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What are the different types of transportation insurance?
In the United States, there are two types of transportation insurance: official carrier insurance and third-party insurance. Official carrier insurance is recognized by logistics companies, but third-party insurance comes from other insurance companies. Both types of insurance are actually very reliable and can provide a certain amount of coverage.
What is carrier transportation insurance?
Carrier transportation insurance refers to the official insurance provided by American carriers, such as USPS and UPS. However, many carriers often do not refer to it as “insurance” because their compensation is conditional. They prefer to call it “liability insurance” or “parcel declaration amount.”
In order to receive compensation in case of lost or damaged packages, for carrier transportation insurance, the sender must provide appropriate evidence to prove that the carrier’s fault caused the problems of lost items and damaged packages.
Except for FedEx Ground Economy, every shipping service from UPS and FedEx automatically includes $100 of liability insurance. However, for USPS, only the Priority Mail service includes $100 of liability insurance until July 9, 2023. Other USPS shipping services do not include any liability insurance. After July 9, 2023, USPS Retail Ground, First-Class Package, and Select Ground will be combined into USPS Ground Advantage, which will include $100 of shipping insurance.
If the declared value of a package exceeds $100, the carrier will charge you a small fee for additional liability coverage. The prices for additional liability insurance from major carriers are as follows:
USPS shipping insurance:
UPS liability insurance:
FedEx liability insurance:
Based on this chart, we can see that shipping insurance prices are actually affordable and something that everyone can afford.
What is third-party shipping insurance?
Unlike carrier insurance, third-party insurance will pay for the entire cost of the lost or damaged package regardless of the cause. The payment will cover the value of the package and shipping costs.
Is purchasing shipping insurance worth it?
Shipping insurance has its own value. However, whether or not purchasing shipping insurance is worth it depends on the value of your package. If the value of your package is less than $100, then you don’t need to purchase additional shipping insurance. But if your package is worth more than $100 and you frequently ship packages, shipping insurance will be important.
Especially for e-commerce sellers, if the price of the goods you sell is high, purchasing shipping insurance will be a wise choice. In summary, whether or not shipping insurance is worth it depends on the frequency of shipping and the value of the package.
For those who want to send items of relatively high value, purchasing shipping insurance is a no-loss proposition. Shipping insurance will make your mailing journey more secure and worry-free.
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