Loss, damage, or theft are some issues that trouble an eCommerce vendor whenever they ship a product to the customer. Certain issues like these arise unexpectedly causing serious financial loss to the shipper. So, how can you overcome this? The best potential solution is to get shipping insurance. Let’s get to know all about shipping insurance here.
What is Shipping Insurance?
Shipping insurance is a policy that a shipper purchases to ensure that they get reimbursed for shipments that are lost, damaged, or stolen in transit when transported with the help of a shipping carrier. You can either avail of shipping insurance offered by the shipping carrier or avail of the same via a third-party service. The cost of insurance varies with the value of the goods that are shipped.
What You Need To Know About Shipping Insurance
So what does shipping insurance cover?
If you see most of the shipping carriers cover insurance for products with a value up to $100 for both domestic and international shipments. USPS shipping offers about $100 coverage for any shipments sent via Express mail services. When you are looking for insurance for your shipments, you need to declare the value of the items. The declared value of the items is the carrier’s maximum liability in the event when there is damage or loss. If you want to get insurance for the item beyond what is offered by the shipping carrier, you need to purchase it. Here are some insurance costs for popular shipping carriers.
| USPS | |
|---|---|
| Value of Contents | Insurance Cost |
| Up to $50.00 | $1.65 |
| $50.01 to $100.00 | $2.05 |
| $100.01 to $200.00 | $2.45 |
| $200.01 to $300.00 | $4.60 |
| FedEx | |
|---|---|
| Value of Contents | Insurance Cost |
| Up to $100 | $0 |
| $100.01 – $300.00 | $3 |
| $100.01 to $200.00 | $1 |
| UPS | |
|---|---|
| Value of Contents | Insurance Cost |
| Up to $100 | $0 |
| Every additional $100 value over $100 | $1.05 |
| DHL | |
|---|---|
| Value of Contents | Insurance Cost |
| Up to $100 | $0 |
| Every additional $100 value over $100 | $1.05 |
| minimum for $300 | $3.15 |
What is the difference between the buyer and a seller purchasing the insurance?
The sellers usually purchase the shipping insurance as they are mostly responsible for shipping the items, from one end to the other, up to the point of delivery. Mostly they are at the risk of monetary loss when any mishap occurs, hence they use insurance as a layer of security for shipping. However, sometimes the buyer purchases the shipping insurance, especially when they are at a location where the delivered packages are less secure.
Understanding the Terms and Conditions for Shipping Insurance
It is important to understand the terms and conditions when it comes to the shipping insurance. Deciding whether to move forward with the shipping insurance, you need to familiarize yourself with the intricacies. Even though the shipping carrier offers certain insurance, there are times when they deny it.
For example, USPS, FedEx, and UPS insurance do not provide coverage for precious stones, cash, and coins. Also, there are instances where they do not provide insurance for certain destinations. Even high-valued items insurance coverage can be limited. Yet another important factor that needs to be considered is the packaging part. Most of the couriers may not approve a claim, just because they caused the damage because of poor packing. It is important to ensure that you use excellent quality packing and you pack the items efficiently.
Remember To File Claims Sooner Rather Than Later
It is always advisable to claim the insurance sooner, especially the moment you know the package is damaged, lost, or even stolen. Ensure that the shipping carrier knows the cut-off time to claim the insurance. For example, for USPS insured mail, the duration for the claim period is 15-60 days. With UPS, it’s five months for shipments within the US locations and up to 60 days for shipments shipped internationally. For FedEx, you need to file the claim within 60 days from the day of purchase if you have not received the package.
Patience is Important
Remember that getting the amount for a claim takes up so much time. Every reimbursement process takes time. Mostly around 7-10 days is required to get your insurance claim processed. If the package is not found, an authorization letter is sent to the concerned persons with the supporting documents. Once the shipping carriers receive the necessary documents, everything unfolds and will be resolved within 3-5 days.
Yet another option is to make use of third-party shipping insurance, which is quicker in the insurance claim process.
Key Benefits of a Shipping Insurance
There are several benefits when it comes to using shipping insurance.
- Peace of mind: Shipping can get rough and can cause several problems when shipping items from one location to another. The best way to get a peaceful sleep when you are shipping is to avail yourself of equally valued insurance coverage on the item.
- Eliminate the burden of replacement costs: If the item you shipped is lost or damaged while shipping, and if you have not insured the item, then as a seller you are going to bear the burden of the cost of the items. If you take up the package insurance, you can save yourself from the delegations of protecting the shipment while in transit and the replacement costs of the item.
- Ideally, it’s easy to get insured: Getting insurance is not a big deal. You can do it at any time, even when you are just checking out from the online store upon purchase. You just need to pay a nominal charge when you are doing so.
- You will save money: Once you have shipped the item, anything can happen, so it is better to get your shipping insurance. Although the paperwork takes time, in the long run, this is going to save you a lot.
- No additional charges to release the goods: The general rule of shipping is that both parties will share the loss equally. Hence when you are insuring the items, your insurance company will take care of the release of goods from the cargo.
- The insurer will handle the loss/damage or anything when the item is stolen: You need not worry about anything when it comes to the item being stolen/damaged or lost while shipping. The insurer will handle all the losses that are occurring, hence you are off the cuff.
Risks of shipping without a shipping insurance
The major risk involved is in the replacement for the items you are shipping upon loss, damage, or when it is stolen. In certain situations, especially when the cost of the item is beyond a certain value, it is hard to pay back the amount. Again, it might not be harmful when you are shipping items in bulk quantities.
So should I get Shipping Insurance?
As you know, there is no one size fits all, hence as the shipping processes differ, the shipping possibilities also differ. When you are shipping certain items, especially the valued ones, you need to ensure that the amount that is at stake when the item is lost, damaged, or reaching the wrong hands does not eat up your profit. Purchasing shipping insurance gives you peace of mind and allows you to be more predictable when preventing the cost of damages.
Shipping insurance is more important for international shipping. It is because the locations to be delivered are farther from the original location and also there are chances that the delivery locations are less secure, which might cause the package to be lost, damaged, or even get stolen.
What are the different types of insurance?
You can find three types of options to choose your shipping insurance:
Carrier-provided insurance: This is mostly provided by the shipping carrier. Most of the shipping carriers offer a minimal amount for insuring the package, for which you need to pay extra.
Third-party insurance: This type of insurance will leave you fearless because they take care of all the matters concerning the package insurance upon loss, damage, or when stolen. The claim processing is quicker when it comes to third-party.
Self-insurance: This covers insurance for parcels that are sent through carriers and provides broader protection for lower rates.
Third-Party Shipping Insurance
Third-party shipping insurance is something that is beneficial when the shipping insurance offered by the shipping is not affordable or the best option. One of the popular third-party shipping insurance is Shipsurance, which offers affordable insurance options. You get the insurance claims done quickly. The good news is that it is easy to integrate Shipsurance into your WooCommerce store using the add-on ELEX WooCommerce Shipsurance Add-On for Shipping Method Plugins.
The plugin works well with any shipping plugin and is easy to install and put to use.
Learn more about the plugin and understand how to use it.
To conclude: Is shipping insurance worth it?
While you ship, risks are common. So rather than worrying all the time about losing the shipment, or delivering a damaged one, or the shipment reaching the wrong hands, you can take up shipping insurance that will curb your worries.
Further Reading:
- How to Protect Your Packages with First Class Mail Insurance?
- Step by Step Guide to enable Shipping Insurance with WooCommerce
- How to Integrate WooCommerce Shipping Insurance plugin to your Online Store
- The Best WooCommerce Shipping Insurance Coverage Plugin
- What Is Shipping Insurance And Why Do You Need It?
