Shipping Insurance Coverage: Why and when do you need it?

Because many hands handle your packages, and cargo goes through different modes of transportation, there’s always the risk freight getting lost or damaged.

Smaller packages can easily get lost during shipping. No wonder business or individuals looking to deliver items to different destinations apply for shipping insurance coverage.

 You can protect your items from any form of damage, theft, or loss with the many shipping insurance services.

Shipping Insurance: What it is 

This is an insurance service that covers and compensates senders for lost, stolen or damaged cargo during transit.

Anyone looking to ship can get these services from courier companies, insurance firms, and other third-party service providers.

Couriers and postal services like USPS, FedEx, DHL, and UPS also offer this type of insurance to its customers up to the pre-decided value of cargo.

In most cases, insurance is free to a specified limit (usually $100). That means packages valued up to that limit are compensated by cash. However, any cargo valued beyond this limit is subject to insurance charges based on the stipulated value of the shipment.

Senders must also understand that shipping insurance coverage has some limitations as well; not all cargo can be insured by these services providers.

For example, the USPS does offer insurance for precious stones, monetary bills, and shipment valued at more than $5000.

Shipping Insurance Cost: Do You Need Shipping Insurance

Like we’d said before, insuring products before shipping is free to a certain limit, so it is ideal for items valued below the $100 cap. However, the dilemma is whether you should consider paid insurance.

In truth, the answer is yes, it is worth spending on insurance if you are sending high-value cargo. It is particularly important for products like pieces of art, electronic appliances, and any other valuable products.

Such products are expensive and need special attention and care while in transit. Even after going for the best courier service, you need an extra layer of protection to sure safe delivery.

That’s why you need insurance coverage for your peace of mind and in the unfortunate event of damages, theft, or loss. It will ensure you get compensated.

So don’t think twice about paid-for shipping insurance coverage if whatever you are looking to send through courier is costly.

And not just that, ecommerce merchants must ensure customers receive shipments in time and perfect shape.

Safe and timely delivery builds trust and leads to future sales, desirable reviews, and a good reputation.

So you want to cover your packages to ensure you receive a refund in case of a hitch, replace the product, and ship again. Without shipping insurance coverage, business owners are forced to spend extra to maintain an excellent seller-buyer customer relationship.

Everything to Consider before Purchasing Shipping Insurance

Because sometimes insurance is a necessity, for instance, if you are shipping a product overseas where the risks of loss and damage are higher in contrast with domestic shipping.

Plus the value of the product is also reason enough to buy insurance.

Discover the most important factors to consider before choosing to insure a particular package for shipping. Some of them will impact your shipping insurance cost.

‘Ship to’ Area/country- The final destination of the freight should help you decide whether to insure a product or not. Your products are safer in more developed countries. But the risk of delivering damaged products is high if your ‘ship to’ destination is remote or a rural area.

Courier Service – International courier services will do their best to have your items transported and delivered in one piece. They recruit a trained workforce to have enough infrastructure to reduce the risks of theft, loss, and damage. But if you must use a new service, protect your shipments with insurance because you are trusting your products with less experienced service providers.

Type of Product- Are you sending breakable or fragile items? These are at an obvious risk of damage. Any mishandling could lead to irreparable damage, which can be costly to a sender if they didn’t insure the shipment. Expensive items will also need paid-for insurance because you don’t want to suffer in case of the unexpected

Conclusion

In a nutshell, in some instances, it makes sense to spend money on shipping insurance. It gives you and the receiver peace of mind to know your shipment is covered against any would-be risks.