Shipping Insurance

You can protect your packages against loss or damage during shipping with insurance provided by the carriers or from independent third party insurers. The decision to buy shipping insurance depends on the value of the package and your willingness to risk completely losing a shipment.

With Shippo, you can purchase the insurance offered by the carriers or discounted 3rd party insurance provided by our partner, Shipsurance. As an example, here is a sample pricing chart for insurance costs via different methods:

Sample Insurance Cost UPS / FedEx USPS Shippo (via Shipsurance)
$150 package value  $2.70 $2.45 $1.50


Shipsurance offers:

  • Up to 50% discounts compared to carrier provided insurance
  • Simple, rapid, and paperless claims processing
  • Coverage for packages to domestic and international destination

Whether you use Shipsurance via Shippo or are reviewing your shipping policies in general, here are the topics to consider:

Is your package already covered by shipping insurance?

Each domestic UPS and FedEx parcel is covered automatically up to a value of $100 against loss or damage. The U.S. Postal Service only provides an automatic $100 of coverage on Express Mail. So if the value of your packages is less than $100, you may not need to purchase additional insurance.

Are your items excluded from insurance coverage?

Insurance providers will not insure certain types of items, items sent to certain destinations, and have a limit on certain items. If you ship jewelry, gems, TVs, or other small, yet expensive items, check the insurance fine print carefully.

Add international shipping insurance.

When shipping internationally with carriers such as USPS or other national carriers, they will hand off the package to the post office of the country of destination. For example, if sending a package from United States to Canada, USPS will turn the package over to Canada Post at the border, and vice versa. If you are sending a package from Canada to the US, Canada Post will hand the package over to USPS for delivery. In these situations, the risk of package loss and inaccurate tracking is higher, so it makes more sense to insure your international parcels.

How much value to insure for?

Insure items for replacement cost. You are unlikely to get more insurance compensation for the item than its current retail value, so do not try to insure items over their regular retail cost and pay additional fees.

Have a data gathering process for insurance claims.

As soon as your customer notifies you of a package that never arrived or of a box that was damaged in transit, make sure you have a process for collecting documentation and evidence of your loss. Your customer service team should know exactly what they are required to collect from the customer so you can process the claim.

Maintain proper paperwork and proof of loss.

Make sure you have paperwork and documentation for any claim you file. For example, in order to file a claim with USPS, you will need a claim form, evidence of insurance, evidence of value, and proof of damage or loss of contents. As an example, here is a screenshot from part of the online claim form:


Looking for specific Shippo instructions for insuring your packages? Please check out our Help Center to learn more.

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