Written By: Narek Hakobyan
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.
When you ship a package, you can declare its value to the carrier. This is what we call declared value, and it directly affects how much the carrier is responsible for if something happens during transit (i.e., loss, damage, or theft). Declared value is based on how much the item costs to you, the shipper, and is often consistent with the customs value. Declared value is essential because it can help you save money on shipping insurance and avoid overpaying for the carrier's liability. If you want to know more about declared value and how it works, you can visit our page here.
What is shipping insurance? Well, it is a type of coverage that protects both the sender and receiver of a shipment from losses due to damage, loss, or theft during transportation. Shipping insurance can be purchased from most couriers and 3rd party providers. The main benefit of shipping insurance is that it can cover your shipment's total value or a percentage of it, depending on the policy and the provider.
Here is some helpful information to keep in mind:
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:
|Value declared by shipper for each package.
|Shipping insurance provides full coverage for
the actual value of the shipment.
|Limits carrier liability to declared value. Many carriers restrict liability
to $100 per package, with a maximum of $50,000 (Note: May not
apply to all carriers).
|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,
especially for high-value items.
|Recommended for valuable or fragile items to ensure
comprehensive protection beyond carrier limits.
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. So, don't overlook the importance of shipping insurance—it's a key component for safeguarding your business.