Declared Value vs. Shipping Insurance
Monday, December 1, 2025
General
Key takeaways
Declared value establishes carrier liability limits, not comprehensive coverage for your shipment
Shipping insurance provides broader protection including theft after delivery and full replacement costs
Major carriers include only $100 default liability—additional coverage requires fees or separate policies
Insurance claims typically process faster than carrier liability claims, reducing business disruption
Healthcare and life sciences shipments exceeding $500 warrant comprehensive insurance protection
Understand the Differences and Know Your Options
Are you confused about the differences between declared value and shipping insurance? Don't worry; you aren't the only one. These two are often mistaken for each other but are different. Understanding the differences between declared value and shipping insurance is important, as they can significantly impact you or your business. This blog post will explain the differences between declared value and shipping insurance, helping you understand your options.
Declared Value Explained
When you ship a package, you can declare its value to the carrier. This declaration directly affects how much the carrier accepts as responsibility if loss, damage, or theft occurs during transit. Declared value reflects what the item costs you as the shipper and typically aligns with the customs value for international shipments.
Declared value helps manage carrier liability exposure. Major carriers automatically assume $100 declared value unless you specify otherwise. You can increase this amount by paying additional fees, though maximum limits apply—FedEx and UPS cap most shipments at $50,000, while USPS limits coverage to $5,000.
If you want detailed information about how declared value works, visit the "What is Declared Value?" article.
Shipping Insurance
Shipping insurance provides separate protection that covers both sender and receiver from losses due to damage, loss, or theft during transportation. You can purchase insurance from carriers directly or through third-party providers who often offer more competitive rates.
The primary benefit centers on comprehensive coverage. Insurance protects your shipment's total value or a specified percentage, depending on your policy and provider. Research shows that approximately 1.5% of packages are lost or stolen during last-mile delivery annually.
Here is some helpful information to keep in mind:
The cost of shipping insurance varies depending on the value of your shipment, the destination, the carrier and the provider. Shipping insurance rates are usually around $0.50 to $1 for every $100 declared.
Shipping insurance doesn't cover all items. Some items commonly excluded are perishables, artwork, cash, hazardous materials, luggage, and liquids.
In order to claim shipping insurance, the sender or receiver has to provide proof of the value, usually an invoice or receipt. Proof of damage, loss, or theft must also be proven with photos or tracking information. Most claims need to be filed within 15-90 days after shipment.
Declared Value vs. Shipping Insurance
Declared value and shipping insurance are both important components when shipping goods, but they serve different purposes. Declared value determines the carrier’s liability in case of damage or loss, while insurance provides coverage for the actual value of the goods. The following table summarizes the differences between declared value and shipping insurance:
Declared Value | Shipping Insurance |
Value declared by shipper for each package. | Shipping insurance provides full coverage for |
Limits carrier liability to declared value. Many carriers restrict liability | Additional coverage beyond carrier liability. |
May influence shipping cost. | Additional cost based on insured value. |
Claims made with carrier per their terms. | Separate claim with insurance provider. |
For basic coverage; often required by carriers, | Recommended for valuable or fragile items to ensure |
Making the Right Choice for Your Shipments
Declared value works well for one-time shipments or lower-value parcels. If your package is worth $100 or less, declared value coverage should suffice for loss or damage protection.
However, shipping insurance becomes essential when you have frequent shipments, handle high-value items, or need international shipping. Temperature-sensitive biological samples and pharmaceutical shipments especially benefit from comprehensive insurance due to their irreplaceable nature and high replacement costs.
Consumer research indicates 51% of buyers lose trust in brands after poor shipping experiences. For healthcare and life sciences operations, failed deliveries disrupt research timelines and damage professional relationships.
Conclusion
In summary, declared value and shipping insurance serve different purposes. Declared value is handy for one-time shipments or when dealing with lower-value parcels. If your package is worth only $100 or less, the declared value should suffice in case of loss or damage. However, if you have frequent shipments, ship higher-value items, or need international shipping, having shipping insurance is a good idea.
Without proper coverage, losing packages can significantly impact your financial operations. Contact Mercury today to learn how we safeguard your critical shipments with expert shipping protection guidance
