Shipping Insurance Cost 2022: What Does It Cover? Is It Worth Buying?

Sobel Network Shipping

The eCommerce industry is rising, and sellers are managing thousands of orders regularly. The shipping process that shipping companies do creates a high possibility of chaos. Shipping companies load their material and transport it to the destination by road, rail, water, or air. Now there is a term called shipping insurance that is introduced by these companies and is quite popular. Even custom brokerage service providers talk about the insurance plans often.

If you are unaware of shipping insurance and want to know more about it, like what insurance is, what shipping insurance cost, whether is it worth it to buy shipping insurance or not, etc., then this article is for you.

What is shipping insurance?

Shipping Insurance is a term introduced by companies providing shipping services to protect your items from damage. With shipping Insurance, all the items are protected from when they are packed until the delivery.

Shipping Insurance is just like other insurances. The company will charge you for insurance, and then if any of the objects suffer damage during the shipping process, it's the responsibility of the company to either repair it or change it with a new alternative.

Every courier company or third-party provider offers shipping insurance, and it is becoming quite common these days.

What does shipping insurance cover usually?

If you are thinking about what kind of items are covered in shipping Insurance, then here are the items that are covered in it:

Lost Parcels
Stolen items
Late Deliveries
Damaged items in Transit

Best Companies for Shipping Insurance

Here are some of the well-tested and trusted companies that are providing shipping insurance facilities.

UPS Shipping Insurance

The United Parcel Service is a company having positive reviews and is quite popular in the country. The company is a reliable firm for anyone looking for shipping insurance facilities. The firm constantly makes efforts to provide great deals to its customers. UPS even gives a small coverage to the customers.

UPS is a company blessed with a good reputation in the market and works toward goods shipping efficiently. However, still, UPS does not offer all types of insurance coverage, and one has to check if their product falls on the list of items that the UPS company secures.

FedEx Shipping Insurance

FedEx is another addition to the list and is a genuine shipping company providing shipping insurance. The company promises the timely delivery of items to avoid any damage. Every package from FedEx has compulsory $100 insurance, and if the value of the package is greater, then someone can buy the coverage easily.

The company requests customers to share the value of packages at the insurance purchase and shows insurance plans according to it. Even FedEx gives a wide range of coverage in its shipping insurance plans.

USPS Shipping Insurance

The United States Postal Office offers shipping insurance facilities to customers, and with USPS, your packages are in safe hands for sure. The company is well known for its value and reputation in the market. USPS offers a cover-up worth $5000 if the package is lost or mismanaged.

The only flaw in USPS is timely deliveries as USPS does not promise a particular delivery time. Still, USPS offers quick shipping facilities, but they will take additional charges for quick deliveries. If you are a person who expects timely deliveries, then USPS is not the right choice for you.

DHL Shipping Insurance

DHL is a quite popular company providing international shipping insurance services. DHL ensures the safety of your packages by providing special security plans. DHL has managed to get good reviews through its outstanding services.

But DHL will not give any automatic coverage if your product does not have a value of more than $100. Unlike others, DHL does not provide coverage of any kind if packages are lost and do not ensure fast deliveries. One should not go for DHL if looking for timely delivery.

How much does Shipping Insurance cost?

The cost of shipping insurance depends on the type of package that is being sent. Each company will have different prices according to their services.

Here are some factors that are used to determine the cost:

How many packages are ordered?
Distance Travelled
Destination

And here, we are going to share the cost of shipping insurance of the carriers that are mentioned above

UPS Shipping Insurance Costs

When going for UPS, if your package value is less than $100, then no shipping insurance charges will be there, and after that $1.05 will be charged as shipping insurance cost for every further $100

FedEx Shipping Insurance Costs

In FedEx, the insurance cost for a $100 product is free. Then, for a $100-$300 package, it is $3, and for packages exceeding $300, it is $1 for each additional $100.

USPS Shipping Insurance Costs

For USPS, packages up to $50 will have a $1.65 shipping insurance cost. For $50.01 – $100 packages, the insurance cost will be $2.05, then $2.45 insurance cost for packages ranging from $100.01 to $200. Later on, for $200.01 – $300 packages, the cost will be $4.60, and in the last packages ranging from $300 to $5000, the cost will be $4.60 + $0.90 per $100 increase.

Is it worth it to buy Shipping Insurance?

Here are some benefits of shipping costs that you can read and decide whether shipping insurance is worth it or not:

After availing of shipping insurance, the owner of the packages is stress-free and doesn't need to bother about the product's delivery and safety.

With shipping insurance, if a package is lost, there is nothing to worry about.

As the online industry is booming and many parcels are being delivered daily, there is a high possibility of mishaps. To get protected from them, one has the option of shipping insurance.

But still, there are some points on who should buy insurance, as buying insurance for a cheap product will not make any sense. Look through the below points to get a clear answer to whether you need shipping insurance or not.

Shipping Volume

As said, the larger the number of packages is, the more chances there are for mistakes, and if you send a huge number of packages daily, then you should buy shipping insurance, and in this case, you can ignore the average cost of packages.

Value of Package

Now, if the value of the package is expensive, then shipping insurance is necessary as the nominal fee will save you significant money in any case of a mistake. You should be calculating the costs of packages sent by you and then look for a suitable shipping insurance plan.

Expected Delivery

If you are a person who is serious about timely deliveries, then yes, shipping insurance is for you, and you should also give an eye on quick shipping services. Yet for this, you are supposed to go for the carriers who guarantee fast deliveries.

Final Words

The eCommerce industry is seeing a rapid rising phase and is witnessing huge numbers of orders daily, which makes it difficult to manage all the shipping processes at the same time, creating chances for damage to products during delivery.

Here, an expert shipping consultancy will only recommend taking shipping insurance. This article shares information about the same whether shipping insurance is worth it or not while explaining the insurance facility including custom brokerage service.