{"id":2147,"date":"2019-09-25T14:59:38","date_gmt":"2019-09-25T19:59:38","guid":{"rendered":"https:\/\/www.shipengine.com\/?p=2147"},"modified":"2019-09-25T14:59:38","modified_gmt":"2019-09-25T19:59:38","slug":"benefits-of-adding-third-party-shipping-insurance-over-declared-value-coverage","status":"publish","type":"post","link":"https:\/\/www.shipstation.com\/blog\/benefits-of-adding-third-party-shipping-insurance-over-declared-value-coverage\/","title":{"rendered":"Benefits of Choosing Third-Party Shipping Insurance Over Carrier&#8217;s Declared Value Coverage"},"content":{"rendered":"\n<p>In 2018, consumers spent <strong><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.statista.com\/statistics\/379046\/worldwide-retail-e-commerce-sales\/\" target=\"_blank\">$2.98 trillion<\/a><\/strong> in global e-commerce, which means billions of packages circulated around the globe. Of those billions, most reached their destination without a hitch. But, inevitably some fell through the cracks, while others arrived to doorsteps damaged or dinged.<\/p>\n\n\n\n<p>According to the United States Postal Service, last year there were over <strong><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/postalpro.usps.com\/address-quality-solutions\/undeliverable-addressed-uaa-mail\" target=\"_blank\">3 billion pieces of \u201cwasted mail,\u201d<\/a><\/strong> which the USPS classifies as parcels that go undeliverable as addressed and fail to list a forward or return address.&nbsp;&nbsp;<\/p>\n\n\n\n<p>While <strong><a href=\"\/blog\/businesses-that-benefit-from-address-validation-apis-6-use-cases\/\">address validation<\/a><\/strong> can help prevent the above scenario from happening, it is not a failsafe against damage or theft. It\u2019s estimated that 1-in-10 packages are damaged during the journey from seller to buyer, and \u201cporch pirates\u201d make an increasing impact on a company&#8217;s bottom line.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-do-i-know-if-i-need-third-party-insurance\">How do I know if I need third-party insurance?&nbsp;<\/h3>\n\n\n\n<p>With the majority of carriers offering built-in and add-on insurance coverage, it can feel redundant to elect third-party insurance. And if your package has a declared value of $100 or less, most carriers also automatically include insurance coverage for free. However, there are distinct differences in coverage, which could ultimately mean huge cost savings for your e-commerce business.&nbsp;<\/p>\n\n\n\n<p>Online retailers\u2014particularly those with high-value or high-volume shipments\u2014are the most at risk for loss when it comes to filing insurance claims directly through the carriers. The chance of packages getting lost, stolen, or damaged when you ship on a consistent basis is understandably higher. <\/p>\n\n\n\n<p>In our experience (and with those odds) it\u2019s better to be safe than sorry. So, here are the primary benefits of electing third-party shipping insurance over the carrier&#8217;s declared-value coverage:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-1-lower-insurance-rates\">1. Lower Insurance Rates<\/h3>\n\n\n\n<p>As a ShipEngine user, you have access to additional insurance through Shipsurance for <strong><a rel=\"noreferrer noopener\" aria-label=\"only 1% (opens in a new tab)\" href=\"https:\/\/www.shipengine.com\/pricing\/\" target=\"_blank\">only 1%<\/a><\/strong> of your shipment value. With some carriers charging upward of 3%, this represents significant savings. Plus, USPS First Class International shipments are covered under the same great rates.&nbsp;<\/p>\n\n\n\n<p>Carriers, like UPS, sometimes also require insurance minimums\u2014meaning you still have to pay a certain amount to insure your package, even if its declared value is under the threshold. Per package, the difference in cost may seem seem negligible. But the cost savings are clear as soon as you put things in perspective.&nbsp;<\/p>\n\n\n\n<p><strong>For example: <\/strong>Let\u2019s say your business ships out 1,000 items every month, and each package has a declared value of $200. If you declared these values with the carrier, you would end up paying $450-$1,150 <em>more<\/em> per month than you would by using the built-in, add-on insurance option.<\/p>\n\n\n\n<p>Here&#8217;s a chart that directly compares the cost of different insurance options:<\/p>\n\n\n\n<figure class=\"wp-block-image is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"385\" src=\"https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-1024x385.png.webp\" alt=\"Table comparing the shipping insurance rates of Shipsurance versus major US carriers, including UPS, FedEX, USPS.\" class=\"wp-image-2153\" style=\"width:800px;height:301px\" srcset=\"https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-1024x385.png.webp 1024w, https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-768x289.png.webp 768w, https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-1536x578.png.webp 1536w, https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-2048x770.png.webp 2048w, https:\/\/www.shipstation.com\/wp-content\/smush-webp\/2019\/09\/Shipsurance-Insurance-Table-scaled.png.webp 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-2-broader-coverage-no-surprises\">2. Broader Coverage = No Surprises<\/h3>\n\n\n\n<p>Not only can third-party shipping insurance be more affordable than working through your carrier, it can also be more reliable in terms of coverage. With the Shipsurance coverage offered through ShipEngine, you can have peace of mind knowing that your package is fully insured\u2014whether it&#8217;s a small parcel or large freight.&nbsp;<\/p>\n\n\n\n<p>One of the biggest misconceptions about declared-value insurance through carriers is that you are automatically entitled to the $100 worth of free coverage for <em>any<\/em> package of <em>any <\/em>value. While this does apply to claims made on packages within the declared value range; if you did not purchase additional insurance and your package was valued at <em>more<\/em> than $100, your claim would likely not be approved.&nbsp;<\/p>\n\n\n\n<p>Many carriers have also created loopholes in their terms of service that make it easier for them to shirk responsibility for lost and damaged packages that fall into certain categories. This include things like perishable products, loss due to a natural disaster, and\/or damage due to insects.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Shipsurance has clearly defined terms that are easy to understand, and it provides ShipEngine users with <strong><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.shipsurance.com\/shipping-insurance\" target=\"_blank\">all-risk coverage<\/a><\/strong>. It covers all of the carriers you use, with one unified set of rules. When you need to check if an item you regularly ship is covered, you have access to a simple reference list of the coverage terms and conditions\u2014so there are no surprises!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-3-claims-without-the-headache\">3. Claims Without the Headache<\/h3>\n\n\n\n<p>Everyone has shipping claim horror stories\u2014especially online retailers. This is largely because shipping carriers are in the business of shipping, not insurance claims and adjudications. Carriers are notorious for making the claims process more frustrating than it should be, and unfortunately this can begin to seep into the customer experience.&nbsp;<\/p>\n\n\n\n<p>Whether it\u2019s in your control or not, how the customer experiences every point of the order fulfillment process is a direct reflection on your brand. No one likes losing a package or waiting for a replacement shipment, particularly during the rush of the holiday season. It\u2019s important to make your customer experience as positive and painless as possible. With an easy claims process, you\u2019re able to reduce the headache of arranging your refund and focus more of your attention on nourishing the customer relationship.&nbsp;<\/p>\n\n\n\n<p>With Shipsurance through ShipEngine, you have direct access to a personal claims agent who will assist you throughout the process should you need to file anything. Claims are filed electronically and paid within 5 business days via check, emailed check, or PayPal.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-4-easy-integration\">4. Easy Integration&nbsp;<\/h3>\n\n\n\n<p>Adding additional insurance to your shipments is as easy as a flip of a switch. With a seamless integration, you\u2019re able to manually add or auto-draft funds directly through your ShipEngine dashboard.&nbsp;<\/p>\n\n\n\n<p><strong>Ready to insure your packages? It\u2019s simple:<\/strong><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Log in to ShipEngine<\/li>\n\n\n\n<li>Select \u201cConnections,\u201d then the \u201cInsurance\u201d tab<\/li>\n\n\n\n<li>Toggle the 3rd-Party Insurance switch ON<\/li>\n\n\n\n<li>Verify that you\u2019ve read and understand the terms and conditions and follow the on-screen instructions<\/li>\n<\/ol>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.shipengine.com\/docs\/shipping\/insurance\/\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" src=\"https:\/\/lh3.googleusercontent.com\/5RKDk8u7MViAkmJ5tN3uUgluNQQ_31rIT7Xiq8ggtxiUQWyboSKMOl_PvU_ftI8zKfwQnt717hIGx4-n__WQe9vnSuUqNSVfTdJzmdmyg4fbCnKI_8HZAmvFnrtELz4OroVlus5VlAt0XIHxYQ\" alt=\"ShipEngine dashboard, connections tab that allows you to turn ON third-party shipping insurance through Shipsurance. Manually fund or auto-draft funds to insure your packages and parcels.\" \/><\/a><\/figure>\n\n\n\n<p>For more information on how to activate third-party insurance for your shipments, visit <strong><a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.shipengine.com\/docs\/shipping\/insurance\/\" target=\"_blank\">ShipEngine\u2019s API documentation<\/a><\/strong>.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2018, consumers spent $2.98 trillion in global e-commerce, which means billions of packages circulated around the globe. Of those billions, most reached their destination without a hitch. But, inevitably some fell through the cracks, while others arrived to doorsteps damaged or dinged. According to the United States Postal Service, last year there were over [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":2152,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[42],"tags":[],"class_list":["post-2147","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-shipping-basics"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v25.1 (Yoast SEO v25.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Third-Party Shipping Insurance vs. Declared Value | ShipEngine<\/title>\n<meta name=\"description\" content=\"Explore the advantages of third-party shipping insurance over declared value. 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