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FAQ: Shipping Insurance thread

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   posted: May. 13, 2005 @ 6:48p
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I’ve seen a fair share of stuff on here about insurance questing about shipping insurance, and the options out there. Let’s Start with a consolidated thread about it.

This post will be updated as needs warrant.

This should not turn into a DHL/FedEx/Ups smashed my package; the driver took a dump on it, and they still haven’t paid my claim. I should be limited to what types are out there, how much, the options available, and smart use of the products out there for the online auction seller.

1. Types of insurance
2. Reasons to insure
3. Costs Associated with insurance
4. Claims


Types of insurance
There are three main types of insurance, and the option of not using any insurance at all.


    • Carrier issued - i.e. USPS insurance, UPS insurance, FedEx Declared Value Coverage, DHL Asset Protection. This is where the carrier is the person you make the claim to
    • Third Party – DSI insurance, U-PIC insurance. A third party that you pay to insure your packages, not the shipping company
    • Self-insured – When a shipper does not make any claims for a damaged package to an outside entity, and they pay the replacement cost out of pocket from a designated fund. Instead of paying an outside insurer a fee for the package, the fee is placed into an account, and is used for payouts.
    • No insurance – Seller pay out claim out of pocket, with no fund in place for payouts.


Reasons to insure

The main reason to insure is for the protection of the shipper, but not all cases warrant insuring. If you can easily replace the item, or refund the money without the item, then insurance may not be needed. If the damaged item would cause significant losses, insurance may be a good idea.

In short, the seller is responsible for delivery of a working item to the buyer. If the item is damaged in transit, the seller is responsible.

A person selling item purchased for $2 and sold for $55 with over 1000 in stock my choose not to purchase insurance, as if one is damaged in shipment, it can easily be replaced with one from inventory for a short loss.

Conversely, an eBay seller selling 2 Dell laptops bought for $750 each for $1000 each may want to use insurance method, as the cost to refund a laptop damaged in transit may be a drain on profit.

Costs of insurance
Carrier
USPS

  • Express Mail - Insured automatically for $100 - $1 for each extra $100 in coverage
  • Registered Mail – First Class or Priority Mail - Starts at $8 for first $100 - $8.85 for $100.01 to $500 - $9.70 for $500.01 to $1000 - Additional $.85 for every $1,000
  • All other classes of insurable mail - $1.30 for first $50 - $2.20 for $50.01-$100 - $1.00 for each additional $100, up till $5,000


UPS


  • First $100 included in rate
  • $100.01-$300 $1.20 minimum
  • $300.01-$50,000 $.40 per $100


FedEx Ground


  • First $100 included in rate
  • $100.01-$300 $1.20 minimum
  • $300.01-$50,000 $.40 per $100


FedEx Express


  • First $100 included in rate
  • $100.01-$500 for $2.50
  • Each additional $100 at $0.50


DHL Ground


  • $.70 per $100
  • Minimum $1.20


DHL Express


  • $.70 per $100
  • Minimum $2.50


Thrid Party
U-Pic - Rates located here
ii. DSI insurance – Rates located here

Claims

It is important to note, with the exception of USPS, the shipper is the one who is supposed to be paid in an insurance claim. The USPS has the option for either the shipper or the receiver of the package.

There is a huge guide on USPS claims over in the Ebay community.

If a claim is to be made, do not have the buyer re-ship the product back to you, the seller. Your claim wil be denied 99.99% of the time, as the carrier will claim the damage might have occured in return shipment.

I suggest you read it, it can be good for other carriers. Remember the USPS has rules it must follow. The others are private insurers, who can bend the rules at times. Persistance is your friend.

For the carrier insurance, most claims require the package be given to the carrier for inspection. DO NOT THROW AWAY DAMAGED PACKAGING UNTIL THE CLAIM IS SETTLED.

The third party insurance will pay out if the deductible for the carrier is reached – i.e. you sell a laptop and insure it with a third party, and ship it via UPS. UPS damages it, and pays out a $100 claim. The third party should pay the balance (item cost -$100).

The amount paid will be the amount paid for the item, plus the cost of shipping the item. For example, if I sell a widget for $400, and charge shipping of $100, but it only costs me $50 to ship said item, the most an insurance claim should pay would be $400 + $50 = $450.

Message edited by: TheBigDon on 2005-07-10 22:25:29
   posted: May. 13, 2005 @ 6:48p

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.


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   posted: May. 16, 2005 @ 5:40p
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Very helpful information, thank you!

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   posted: May. 18, 2005 @ 1:40a
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Claims:

It should be noted that if you use your auction as proof of the value of your item that FedEx will use the final price NOT including S&H. I sold an item with high ($100) S&H charges and they only wanted to reimburse me for the final bid price. The CSR I talked with was an idiot so YMMV, but be aware of the pitfalls of high shipping charges.

In the end it didn't matter since they eventually found the package and returned it to me (after I'd already refunded the buyer).

Message edited by: sieglerc on 2005-05-18 01:41:07
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   posted: May. 19, 2005 @ 2:45p
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sieglerc said:Claims:

It should be noted that if you use your auction as proof of the value of your item that FedEx will use the final price NOT including S&H. I sold an item with high ($100) S&H charges and they only wanted to reimburse me for the final bid price. The CSR I talked with was an idiot so YMMV, but be aware of the pitfalls of high shipping charges.

In the end it didn't matter since they eventually found the package and returned it to me (after I'd already refunded the buyer).

No, what they were going to refund you was the Item's cost plus the actual cost of shipping. Your 'high handling charge' will not get refunded ever...

My .02...

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   posted: May. 19, 2005 @ 4:18p
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rsuaver said:sieglerc said:Claims:

It should be noted that if you use your auction as proof of the value of your item that FedEx will use the final price NOT including S&H. I sold an item with high ($100) S&H charges and they only wanted to reimburse me for the final bid price. The CSR I talked with was an idiot so YMMV, but be aware of the pitfalls of high shipping charges.

In the end it didn't matter since they eventually found the package and returned it to me (after I'd already refunded the buyer).

No, what they were going to refund you was the Item's cost plus the actual cost of shipping. Your 'high handling charge' will not get refunded ever...

My .02...

That's correct, the actual cost of shipping can be made in a claim, but not handling, nor the cost of the insurance.

rated:
   posted: May. 20, 2005 @ 10:16a
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OP, correct me if I'm wrong:

But isn't the First $100 included in rate apply to DHL as well?

DHL Rates/Fees

EDIT: You're right OP.

Message edited by: ebytes on 2005-05-20 10:21:57
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   posted: May. 20, 2005 @ 10:49a
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I'm about to get into a big fight with FEDEX.

5/19 10:20am - Notice from Paypal of "unauthorized funds" used to purchase a $290 item from me
5/19 10:30am - Call FEDEX and have them cancel the shipment (due to arrive 5/20) and ship back to me
5/20 9:30am - Look at MyFEDEX and notice the status is now "Out for Delivery" WTF
5/20 9:45am - Call back FEDEX - they don't know what to do now - they send me to the local carriers office and talk to the manager there to find out that the delivery vehicle that package is on does NOT have a cell phone. Therfore the package will most likely be delivered.

Shipped FEDEX Signature Home Delivery 1 day after auction. $300 insurance - SPP Eligible - Shipped to Confirmed Address.

I can't imagine losing a PayPal dispute because following their SPP (it's PP so who knows though) but I didn't want to chance it so I had FEDEX cancel it.

Now since PP is horrible and if somehow I lose the dispute - do I even have a chance at a FEDEX claim. I mean I'll try but don't even know if I have a chance. I mean, the item wasn't damaged and it was delivered. I guess we'll see.

------------------------

EDIT - 5/21 PayPal - "We have reviewed the transaction in question, along with the information
you have provided, and have determined that the transaction does qualify
for the PayPal Seller Protection Policy. We have cancelled the temporary
hold placed on these funds and they are once again available in your PayPal
account balance."

Now the funny thing is that I think FEDEX was sending someone back to get that package since they were in error. If I get that package back, and since I already got my PayPal money back, what do I do?

Message edited by: EvuLFleA on 2005-05-21 20:51:00
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   posted: May. 21, 2005 @ 1:55p
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ebytes said:OP, correct me if I'm wrong:

But isn't the First $100 included in rate apply to DHL as well?

DHL Rates/Fees

EDIT: You're right OP.

No problem, I know all three major carriers changed their insurance around in the last few years, UPS and Fedex have a minimum "buy-in" amount, so any pakcage over $100 is insured at the high dollar rate untill about $500.

It dook me a while to belive DHL doesn include ANY isnurance with any package.

A few years ago they did cover our account with a flat insurance built in to the rate. We haven't shipped anything expsnsive at work for about 4 years via airborne/DHL, so when I saw the change in terms I was really taken a back by the new terms.

Message edited by: TheBigDon on 2005-07-05 18:50:11
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   posted: May. 21, 2005 @ 2:19p
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EvuLFleA said:I'm about to get into a big fight with FEDEX.

<snip>

Now since PP is horrible and if somehow I lose the dispute - do I even have a chance at a FEDEX claim. I mean I'll try but don't even know if I have a chance. I mean, the item wasn't damaged and it was delivered.

You can hope for a claim adjuster who is on the last day of his two week notice. You're SOL. If the package was lost, you have it easy. If you want to claim damnage, FedEx would want to see the pakcage; I doubt the buyer will be easy to find.

You want the PayPal Chargeback thread, which went AWOL sometime last week, but you've found the Wayback Machine, and good luck with it!

rated:
   posted: May. 21, 2005 @ 8:19p
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Thanks for the post OP, this should be a sticky at the top of the page. Will help eliminate many repetitive posts here.

rated:
   posted: May. 22, 2005 @ 10:23a
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peters317 said:Thanks for the post OP, this should be a sticky at the top of the page. Will help eliminate many repetitive posts here.

If there are enough people to ask the mod's, then the group feels it it's a good idea, then sure, sticky away.

rated:
   posted: Jun. 13, 2005 @ 10:53p
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Bumpage, and hoping someone give this a lil sticky!

rated:
   posted: Jun. 15, 2005 @ 12:29p
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I have had a good run with FedEx. They are cheaper to ship ground to most places, and deliver earlier than the estimated delivery. People are happy, I am happy. One auction item was broken in shipping, FedEx delivery guy noticed that the box was smashed, contacted me as to whether to deliver or not. I told him not to, but to send it back. The package came in same day the check from FexEx. Second time, I sold a mobo off eBay, a month later the guy claimed that it was damaged in shipping, asked him to return it to me for refund (upon receipt and inspection) and filed claim with FedEx at the same time (after 30 days). Got the money from FedEx no problem, still don't have the board from the guy. I like that I can drop off the package at Kinkos any time of the day.

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   posted: Jun. 21, 2005 @ 1:38p
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Ok, I just used Fedex Ground for the 1st time today, and I am confused by the disclaimer on the back of the shipping form "Fedex Ground does not provide insurance of any kind..." What the heck is that?

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   posted: Jun. 24, 2005 @ 10:57a
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davamond said:Ok, I just used Fedex Ground for the 1st time today, and I am confused by the disclaimer on the back of the shipping form "Fedex Ground does not provide insurance of any kind..." What the heck is that?

Technically, UPS is the only insurance, FedEx DHL call it something else – Declared Value Coverage and Shipment Asset Protection.

In short, there not true insurance, they act the same way, look the same, but don’t have a insurance company coverage.

USPS can call it insurance, not sure if it is underwritten in the same manner as insurance, or if the Federal Gov. gives them a pass.

Message edited by: TheBigDon on 2005-07-05 18:49:30
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   posted: Jul. 5, 2005 @ 9:37a
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EvuLFleA said:
Now the funny thing is that I think FEDEX was sending someone back to get that package since they were in error. If I get that package back, and since I already got my PayPal money back, what do I do?

LOL.. if you get it back.. then go get yourself a steak dinner and relist the item!

w00t!

rated:
   posted: Jul. 5, 2005 @ 4:09p
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bump

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   posted: Jul. 7, 2005 @ 9:30p
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ebaydotcom said:bump bumping a sticky?

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   posted: Jul. 27, 2005 @ 4:03p
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TheBigDon said:ebytes said:OP, correct me if I'm wrong:

But isn't the First $100 included in rate apply to DHL as well?

DHL Rates/Fees

EDIT: You're right OP.

No problem, I know all three major carriers changed their insurance around in the last few years, UPS and Fedex have a minimum "buy-in" amount, so any pakcage over $100 is insured at the high dollar rate untill about $500.

It dook me a while to belive DHL doesn include ANY isnurance with any package.

A few years ago they did cover our account with a flat insurance built in to the rate. We haven't shipped anything expsnsive at work for about 4 years via airborne/DHL, so when I saw the change in terms I was really taken a back by the new terms.

That is news to me. I always thought DHL included insurance for the first $100 of declared value

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