How to Get Shipping Insurance

Knowing when to insure an item is an important part of your online business. Insurance will provide you with partial or full reimbursement in the event that your item is damaged in transit. Although statistically very few packages are lost or damaged during shipment, it is still a very important choice.

1. Decide whether to insure

Assuming your item is already packed and addressed correctly, but do you need to protect the contents further? You’ll need to answer these questions:

  • Is it fragile?
  • Is it high value?
  • Is it rare?

All of these considerations should be taken into account when making this decision. Insurance is not free and it is an expense that is generally paid for by your buyer.

Some suggestions:

  • Insure if item has a value greater than $50.00 (e.g. Apple iPod)
  • Insure if item can be considered fragile (e.g. Lladro crystal vase)
  • Insure if item is unique or irreplaceable (e.g. Signed Original Art)
  • 2. Decide which shipping provider is best

    If you ship through USPS (Postal Service), USPS does not offer any automatic form of insurance. Without taking the action of purchasing insurance, your items are not protected and depend upon the gentle handling of the Federal government. If you specified that insurance was required when you listed the item, it will automatically be included when you request a postage paid label. If insurance was optional and the buyer elected to purchase insurance, that is also automatically added to the label.

    If you ship through UPS or FedEx, they will automatically protect against loss or damage up to a value of $100. For protection above $100, you may declare a value up to $50,000 for an extra charge.

    3. Handle lost or damaged items

    In the event of damage or loss, the claim process is your responsibility and not that of the buyer. The buyer should be refunded wholly or in part based on the circumstances. For example, one of six glasses broken in shipment warrants a 1/6 refund, so you file a claim with the shipper to reclaim the value for the damaged glass.

    The process for UPS is as follows: To file a claim for a lost of damaged item, the easiest thing to do is to call UPS at 1-800-PICK-UPS and press 0 to talk to someone. You must have the following information ready to file your claim:

    • Tracking number
    • Information on how the item was packed
    • Value of the item for which you are filing – Buyers telephone number
    • You can also get more information about the UPS claims process at

    The process for USPS (Postal Service) is as follows: If your insured mailing has been lost or damaged in transit you can recover the value of the item by filing an insurance claim at any post office.

    It is your responsibility to process a claim for a broken or lost item. For directions on how to process a claim through USPS please visit: In most cases, USPS allows up to 180 days to file a claim for a damaged or lost item. However, there are particular occasions in which you must file the claim within 60 or 90 days. The above link will bring you to a USPS website that clearly outlines the details of the claim process.


    • Don't forgo spending on insurance to save a few dollars. If your package gets lost or damaged in the process, you will regret it every time. Better be save than sorry.

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