Posted on February 27, 2019, by Matt Morelli
How often do you think about shipping insurance? Probably not very often, and most likely only when you need to get something shipped and you want it to get to its destination in one piece. There’s always the temptation to skip on the insurance and just hope for the best, but that’s not always a great idea.
The challenge that many eCommerce businesses face, is that shipping insurance rates have increased in cost considerably, even since last year. More importantly, it’s not always obvious how much they cost to begin with!
Take FedEx, for example. When you use FedEx and want shipping insurance, the insurance cost is based on the value of the item or items you are shipping. For the first $100 of value, coverage is free, and so you pay no extra. Once you go a single cent over $100, the cost is a minimum of $3 up to a value of $300.
When you go higher still, the insurance cost increases by $1 per $100 of value – so if your item is worth $350, or $302, or $399, the cost is $4 for shipping insurance. (1) It might not sound like a great amount of money, but if you ship ten, twenty, or more parcels a day, it soon adds up – and if the contents of your parcel are of a higher value, it adds up that much quicker.
If you choose UPS over FedEx, you’ll find yourself in a similar situation. The $100 is free, but anything over that incurs a $1.05 fee per $100 of value. But to complicate matters, the minimum charge is $3.15! (2)
This makes the shipping insurance cost for a $200 product $3.15. If the product is worth $400, you’ll pay $4.20.
It’s the same story with USPS, where again the first $100 of value may have free coverage. But that’s the good news. Covering contents that are valued over $100 and up to $200 costs $3.50. If your item is over $600 (but less than $5000) you’ll pay $9.35 as a base figure, and then an extra $1.35 per $100 of value over $600…so if your item is over $1000, you’ll be getting very close to $20 to insure a single package.
All these rates have increased since last year, but a U-PIC, we’ve frozen our rates – they are the same as they were last year. Not only that, they are some of the lowest rates around! In fact, our rates can be up to 90% less than what you may be used to paying.
Consider a package with a value of $700. Sending via FedEx will cost $7.00 for shipping insurance, it’s $7.35 with UPS, and a massive $10.70 with USPS.
U-PIC can provide the same coverage for just $1.75.
Let’s not forget about the claims experiences and how they vary greatly among providers. Our customers have told us about their claims experience history with the carriers, with claims taking weeks, or months to be processed. Or, claims being denied because the carrier’s own tracking data shows that a delivery was completed. That is not a problem you will run into with U-PIC Shipping Insurance. We work hard to adjust our client’s claims in about a week. That is our goal, and the average time our clients wait to be made whole again. We would say that the claims experience at U-PIC is worth the money you pay, but you pay far less insuring packages through U-PIC than through the carrier, so it’s a win.
Our rates average $0.35 per $100 of value, so when you want the absolute best value for money, choose U-PIC for your shipping insurance needs.