Shipping Insurance - What you need to know
Uncategorized March 14th, 2008
Shipping Insurance
First let’s go over the different kinds of insurance methods, and the pros and cons of each.
Types
There are 3 kinds of insurance available:
- Carrier Insurance
- 3rd Party Insurance
- Self Insurance
Carrier Insurance is insurance offered by USPS, FedEx, UPS, etc. This is the most common kind of insurance. Services like UPS and FedEx often include insurance at no extra charge, whereas services like USPS charge a fee for the service.
Pros:
- Can be purchased with the shipping costs.
- May be provided free of charge.
- Provided by a major company.
Cons:
- Claims can take awhile to be processed.
- You may need to present a damaged package at their location for inspection, or make yourself available at your home or office for someone to inspect the damage.
- Wait times before filing a loss claim can be longer than other insurance methods.
- Could cost more than other methods.
- May not cover international shipments.
3rd Party Insurance is insurance purchased on your behalf through a private company not affilated with the carrier. They agree to cover your package in the event of loss or damage.
Pros:
- Can be purchased with shipping costs through some providers.
- Can be purchased seperately through some providers. One provider gives you up to 3 days to purchase insurance.
- Costs less than some other methods.
- Some providers share the revenue with the seller.
- Claim processing time is often 1-2 weeks.
- Many 3rd party providers will cover international shipments.
- Damages can often be proved by photograph instead of having to be in person.
Cons:
- Providers are often lesser known.
- May take an additional step if your insurance provider is not the same place you purchase your postage from.
Self Insurance is when the seller is assuming the responsibility of the package. In other words, if your package were to become lost or damaged the seller would be the one to cover the refund or replacement out of pocket.
Pros:
- Claim processing time can be extremely quick since there is no middle man.
- The money saved on insurance costs may allow the seller to offer insurance at a lower rate, or to be able to provide their products at a better deal.
Cons:
- Seller may not honor their agreement. But as you’ll see later in this guide, that can be an issue irregardless of which insurance method used.
- If the seller does not set aside funds to cover the possibility of claims, they may not have the funds available to issue a refund or replacement in the event of a claim. This is more of an issue with high ticket items.
Why do you need insurance?
A seller’s responsibility is to ship your order in a reasonable timeframe and in the condition described. A seller can not control how your package is handled in transit. Therefore it is not the seller’s responsibilty if the shipping carrier loses, drops, kicks or stomps on your package. Their responsibility to that package ends when they turn it over to the care of the carrier.
So if it is not the seller’s responsibilty who’s is it? The carrier’s. But not all carriers care about that responsibility. Let’s say you ship a package via USPS with delivery confirmation. So you have proof you mailed it. A month passes and the package has not arrived. Try calling you USPS office. They will confirm that you shipped it and then…. nothing. They don’t do anything about lost packages unless the package is insured. The most the y will do is tell you to fill out a PS FORM 1510 Mail Loss and Rifiling Report. What is that going to do for you? Not a whole lot. The form will be sent to the dead letter office and you will be notified if it ever happens to find it’s way there.
So what’s a buyer to do to protect themselves? Insure insure insure! Do you have to insure every purchase you make? Absolutely not. But you should insure the packages that you don’t want to assume the responsibility of. Because that is the real issue. If your seller offers you the option of insurance and you reject or decline that option, YOU are accepting full responsibility of that package and releasing the seller from further obligation. The seller is still responsible for shipping promptly and in described condition, but they are not in charge of physically delivering that package to you unless they themselves ARE physically delivering that package to you, which could be the case if they are local to you.
The DON’Ts
- Don’t expect a seller to cover a package that was lost or damaged in transit. If you choose not to insure you accepted the responsibility for that package. If something ultimately does go wrong with your order, trying to hold the seller responsible for your decision is paramount to fraud.
- Don’t expect a seller to refund the price of insurance after a package was received in good condition. You paid to insure that your package would arrive, and arrive in good condition. If it did those things, you got what you paid for. Why would you ask for a refund for a service you received?
- Don’t expect a seller to refund the price of insurance after you file a claim. The amount you pay for insurance is usually non refundable. the insurance you pay gies you the right to file a claim. If you hadn’t paid insurance you wouldn’t have the right to file a claim. So if you ask for a refund of the insurance amount you may not be eligible for that claim any longer. Insurance is a service, it was provided, how could you epect a refund for a service you received?
- Don’t leave negative feedback for a seller because of a carrier error. Ebay feedback is designed to comment on the seller. If, for example,UPS makes a mistake with your package that is not the seller’s fault. therefore it is not something that should be included on their feedback. Other eBayer’s don’t need to know that your UPS driver stepped on your poster. However, they do need to know if your seller did not handle the claim in a timely manner.
- Don’t expect an insured package to be marked INSURED on the package. 3rd party, self and some carriers do not note the outside of the packages as insured, even when they are.
The DOs
- Do contact your seller immediately in the event of loss or damage.
- Do save the item(s), shipping box and all packing materials unil the issue is resolved.
- Do provide any insurance requirements, such as paperwork or proof of damage, in a timely manner. Most insurance providers have a timeframe claims have to be completed within. You could lose your right to file a claim if you do not comply.
- Do give your seller a reasonable amount of time to file the claim and keep in touch with him or her through the process.
- Do let the seller know if you prefer a repair, refund or replacment.
- Do ask any questions you have about a seller’s insurance policy prior to bidding or buying.
- Do expect your order to be covered if you paid for insurance, even if your seller forgot to (or decided not to) purchase insurance. If the seller does not purchase insurance than they are self insuring by default.
One final issue I feel deserves mentioning. Most insurance claims need to be filed through the seller. That means you depend on that seller to handle your claim properly. Make sure you keep notes on when you notified your seller, when the claim was submitted, etc. I had a seller never file a claim for me on an item that was received damaged. It was shipped Fedex, and automatically insured, so filing my claim cost them nothing except a few mintues of their time. Yet they never did it. Make sure you keep track of your claim every step of the way.
Happy Bidding!
Tags: Metaphysical
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