What is Declared Value?
In shipping, declared value is the amount a shipper states their package is worth when tendering it to a carrier. This figure determines the carrier’s maximum liability in the event of loss or damage. While often mistaken for shipping insurance, declared value is not the same thing. Instead, it functions as a limit on what the carrier might pay - provided the claim meets the carrier’s requirements and liability is accepted.
How Declared Value Works
Most major carriers, such as UPS, FedEx, and USPS, automatically include limited liability coverage - typically up to $100 per package - at no additional cost. Shippers can increase the declared value for an added fee, but this does not guarantee full reimbursement of the stated amount. Instead, carriers typically pay the lesser of:
- The item’s replacement cost
- Its depreciated value
- The actual repair cost
This limitation means that even if you declare a higher value, your payout may still fall short of the amount needed to replace the shipment.
Limitations and Exclusions
Declared value is governed by strict carrier terms. Many items - such as fragile goods, high-value electronics, perishable items, or restricted commodities - may be excluded entirely from carrier liability. Additionally, consequential damages, lost profits, or intangible losses are rarely covered. If a carrier denies liability due to improper packaging, prohibited contents, or missed deadlines, the declared value offers no recourse.
Why Many Shippers Choose Shipping Insurance Instead
For businesses and individuals shipping high-value or time-sensitive goods, relying solely on declared value can leave significant gaps in protection. Licensed shipping insurance providers, such as U-PIC Shipping Insurance, offer:
- Broader coverage that applies to a wider range of commodities
- Faster claims processing with clear timelines and communication
- Full-value reimbursement without depreciation deductions
- Streamlined filing that avoids the red tape of carrier liability disputes
U-PIC’s policies are designed to work alongside your existing shipping process, integrating seamlessly whether you ship through a single carrier or multiple platforms. By opting for insurance rather than relying on declared value, shippers can secure true peace of mind and protect their bottom line against unforeseen losses.
