Shipping insurance: Why, when and how should I use?

February 22, 2022

For many online sellers, shipping insurance can seem like a waste of money. Until a package arrives damaged or gets lost... that's when you wonder why you didn't invest a little extra money in one.

But when is it wise to get one, and when is the package insured by default?

Where do you have to insure them and how do you have to make a claim if a package is damaged or not delivered?

To answer all these questions and more, we've put together a guide to shipping insurance.

Why is it worth having shipping insurance?

You assume that your packages will be delivered to your customers in good condition. After all, you pay a shipping company a fee and usually everything goes smoothly.

But carriers ship millions of packages every day, both domestic and international. That makes the risk of a package getting damaged or lost higher.

And not only will you lose shipping costs and the value of the package contents, but you also have to pay for a replacement product and pay shipping costs again.

When is shipping insurance the wisest choice?

Shipping insurance is not always necessary. We suggest the following: insure items that you cannot afford to replace in case of damage or loss.

This means that it is wise to insure packages whose value is high. Taking out shipping insurance is also the right choice when shipping internationally.

After all, several parties will take care of your packages during the entire shipping process, which increases the likelihood of problems.

Insured by default

Additional insurance is not always necessary, as some shipping methods include insurance by default.

Always check the terms and conditions of your shipping carriers before purchasing additional insurance.

If there is no standard amount insured, you can purchase additional insurance independently.

You may also choose to purchase additional insurance if the standard insurance is for a certain amount that does not cover the entire contents of your package.

What should you pay attention to when sending insured packages?

Insured shipments offer a lot of advantages. But there are things to look out for to fully benefit from it.

We have compiled a list of the most important points for you:

  • Comply with the mandatory packing requirements to be eligible for compensation.
  • Carefully check the value that can be claimed: if your shipment is underinsured, it's a waste of money.
  • Pay attention to the excluded destinations to avoid having your claim rejected.
  • Take note of the excluded products to avoid being insured for nothing.
  • Be sure to keep the proof of delivery so that you can show it when claiming damages.

How to make a claim?

It is extremely annoying when a package is damaged or lost. But, if you have insured your shipment, you can file a claim with the carrier.

To file a claim, you need the following:

  • Invoice of purchase
  • Invoice of sale
  • Photo of the inside of the package
  • Photo of the outside of the package
  • Photo of the damage to the product
  • Proof that the package was damaged

What happens if your shipment is lost?

If your shipment spends more time on the road than expected, it may have been lost. Still, a delay doesn't always mean trouble.

The carrier must be the first to declare the shipment officially lost. This often takes 10 days of waiting.

In the meantime, the shipment can still be found and delivered. During that time, you can try to find out what has become of your order, but you cannot yet file a claim.

You can initiate a claim for your lost package after those days of waiting.

To do so, the following information is required:

  • Date of pickup or delivery to a service point
  • Physical characteristics of the package (color of the box, color of the tape, dimensions and weight)Tracking code of the shipment.
  • Pickup and delivery addresses.
  • Detailed description of package contents.
  • Sales and purchase invoices.
  • Proof that your customer did not receive the package.

You can send this information to the customer service department of the party you shipped with, or directly to the carrier.

If your package had additional insurance and has been declared as lost, you will receive the value of the purchase including shipping costs.

Damon Baca

Co-Founder

Crossborderit (CBIT)

www.crossborderit.com/IOSS