Your Biggest Shipping Insurance Questions, Answered

When you consider that 1.7 million packages are lost every day in the US, and 70% of consumers say they won’t return to an online store after a poor delivery experience, the risk of not including shipping insurance to protect your customers’ e-commerce orders becomes painfully clear.

To help you get a better understanding of the whys, whens, and hows of insurance, we’ve collected some FAQs inspired by the 40-minute session and answered them for you below.

When is the right time to add insurance?

Having to replace valuable products that get damaged or lost in transit can hurt your bottom line, so when shipping these types of packages, adding insurance is often a great idea. For example, it makes sense to insure big ticket items such as noise-canceling headphones or hand-crafted jewelry to make sure those more expensive orders are protected in case of damage or loss.

Spending a little extra time to insure your products far outweighs the risk of having to cover the total cost should something happen to it in transit.

In which cases should you not add insurance?

There are some rules and restrictions in place to help mitigate the chances of a package being damaged or lost. There is a small list of excluded products that XCover through Shippo does not cover:

• Animals.
• Arms, ammunition, military equipment or any similar items subject to the Arms Export Control Act.
• Automobiles, motorcycles or other motorized vehicles.
• Bulk and Break Bulk Cargoes.
• Bullion.
• Cannabis and related products, whether natural or synthetic, including but not limited to hash, hemp, edibles, or items containing Tetrahydrocannabinol (THC).
• Cash.
• Cigars, cigarettes, tobacco or tobacco products.
• Credit cards.
• Documents of any nature, including without limitation bonds, deeds, manuscripts, securities or plans.
• Furs, skins or hides.
• Hazardous, restricted or controlled items.
• Perishable foodstuffs and other temperature sensitive items.
• Plants.
• Precious metals or stones.
• Stamps; and
• Treasury notes.

There are also some countries that XCover cannot insure packages to. Those counties include any that are on the sanction list from the United Nations, European Union, United Kingdom, or United States.

What’s needed to file a claim when an item is damaged?

If there is a claim for damage, make sure your customer keeps the items and the packaging as they received them so that XCover can request photos if need be, and to make sure it doesn’t get lost or further damaged via return shipping prior to completing the claims process.

How do I include shipping insurance?

You can easily add shipping insurance to any order during the label creation process directly in Shippo! Your connected store items will automatically populate, or you can add them manually if need be, and you can further protect your package by including a signature confirmation. Before you purchase, just add insurance and total value when you review the label, then simply download and print the label to send your insured order on its way.

What if the tracking shows delivered, but my customer said they never received the package because it was stolen?

If there is video evidence of someone stealing a package or a police report has been filed because a witness saw someone take something off a porch, you can be covered. In the event those can't be sent to XCover they may require additional documents.

How does packaging impact shipping insurance?

Your shipment must be sent in a corrugated or protective box along with the proper dunnage in order to be insured. USPS and other carrier branded packaging is also absolutely fine to use. You may also use your own business's branded boxes as well.

How long does an insurance claim take?

It typically takes about three business days, and as soon as the claim is processed, you’ll get paid via paper check, electronic check, or PayPal. XCover quickly reimburses you so that you can send a replacement order ASAP and keep your customers happy.

Can I recover shipping fees with shipping insurance, or is it just the item cost that’s covered?

XCover can cover both the retail value of the item as well as the shipping costs – just make sure to add those costs to the total value when you opt to insure your package.

Do I need to require a signature to be covered with shipping insurance?

Certain items do require you to add signature confirmation in order to be covered. Jewelry, computers, and TVs worth more than $250 require you to add signature confirmation in order to be able to use shipping insurance for that parcel.

How much does shipping insurance cost?

For domestic shipments within the United States, shipping insurance will cost 1.25% of your package's total value. For international shipments that percentage is 1.50%. There is also a 25% deductible when filing a claim for items such as watches, jewelry, antiques, artwork, ceramics, and glassware. There are no minimum fees applied to packages ensured with XCover through Shippo.

Should I add shipping insurance as an option for customers to purchase with their orders?

Allowing your customers to opt for insurance in their cart experience – or even just clearly communicating with them on your site that you insure your e-commerce orders – can add more trust in the shipping process from the consumer side, which helps encourage more online purchases.

What’s the benefit of using a shipping solution or 3rd party provider over purchasing shipping insurance through the carrier?

The claims process usually takes a lot longer and can be more cumbersome than if you insure via a 3rd party provider or shipping solution such as Shippo. With Shippo, for instance, it’s cheaper to insure than it would be directly through the carrier, and any claims filed are managed directly with XCover as opposed to dealing with the carrier.

How does insurance work for multiple boxes going to a single customer?

Coverage is determined on a per package basis, not on a per shipment basis, so multiple packages must be insured individually.

How should I communicate the claims process to my customer if their package is lost or damaged?

You can add the details to an FAQ page on your website or in an order confirmation or tracking email so that if a package is lost or damaged, your customer knows exactly what to do. If you’ve added insurance through Shippo, your customer simply needs to contact you about the package, and then once you initiate the claim with XCover, their team will send you an affidavit link to forward to your customer.

By adding XCover through Shippo, you’ll not only get a fast and easy claims process, you’ll also be reimbursed quickly and enjoy affordable premiums. Sign up for a free Shippo account to protect your revenue from damaged or lost packages and keep customers secure and satisfied. If you’re already a Shippo customer, simply head to your Orders page to add shipping insurance. You can also check out our help center for additional information.