When you buy shipping insurance, you could be excused for thinking that all companies offer essentially the same service – but nothing could be further from the truth.
In fact, you’ll often find that shipping insurance offered through shipping carriers isn’t insurance in the truest sense of the word at all. You’re not actually covered for the value of the item, but only for the cost of a replacement, or even the manufacturer’s cost.
If you’ve sold an item for $500, and it gets damaged or lost, you’d expect to get your $500 back. If the cost of a replacement is just $150, then you’ll get $150, and that’s all.
U-PIC Shipping Insurance is a true insurance company, and so if you’ve insured your item for $500, that’s what you’ll get – so how do the other companies get away with it?
At times, the claims process with carrier shipping insurance can be quite difficult. With FedEx, for example, if an item is damaged, they reserve the right to inspect it on the recipient’s premises. Of course, the recipient doesn’t really care about this inspection – they just want their item. Sometimes the buyer throws the (broken) goods away before the carrier can even inspect them.
Check out what you find on page 139 of the 2019 FedEx service guide (1):
"You may transfer this risk to an insurance carrier of your choice through the purchase of an insurance policy. Contact an insurance agent or broker if you desire insurance coverage. WE DO NOT PROVIDE INSURANCE COVERAGE OF ANY KIND."
As well as not providing insurance, page 137 states that if there is a problem with the shipment, FedEx will pay out a figure not exceeding the cost of repair, the shipment’s depreciated value (so not its true value) or the cost of a replacement. The choice is based on whatever costs least!
UPS on the other hand may require a police report to confirm that a shipment is missing and will try to process a claim within 120 days. Should they fail, they will update you every 60 days for as long as it takes – which could be forever.
Page 173 of their service guide (2) indicates that UPS do not offer insurance on any item with a declared value of over $100, and insurance should be obtained elsewhere. If you declare less than $100 of value, UPS will pay out the lowest of $100, the declared value, the purchase price of the item, or the repair/replacement cost.
The only way to be compensated more than $100 is to pay an extra fee which may be disproportionate to the actual shipping costs.
U-PIC will honor the value of the item you have insured, and make sure you get your shipping costs returned too – why wouldn’t you use a real insurance company to provide your shipping insurance?
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