USPS insurance, is it worth it? Would like to hear some of your experiences.

Huntsman Knife Co. LLC.

Huntsman Knife Co. LLC.

Moderator
Knifemaker / Craftsman / Service Provider
Feedback: +153 / =0 / -0
Joined
Sep 10, 2010
Messages
3,624
I insure all the packages I send that are over $200 but the price of USPS insurance has gotten so steep that I am beginning to wonder if it is worth it. I have been fortunate enough to have never lost a package so Im not even sure how the whole insurance claim thing works.

What are your experiences with USPS insurance? Did they come through when you had a package lost or damaged?
 
From what I understand, you need the bill of sale for the item to make a claim and then you only get 1/3 the value back.
 
I have been fortunate, or not so much. Since I started National Knives in 2005, I have lost a total of three (3) packages. All went to Germany, two were sent USPS Priority and tracking stopped at the border so I don't really know what exactly happened to those packages. Those two combined, amounted to a bit over $200.00 in value. The third package I lost was sent USPS Express International and I insured it for the maximum amount of $500.00. The package contained $716.94 worth of product. After it was all said and done, I received 540.80 back (500.00 for the insurance and 40.80 for the postage).

With that said, there are a couple of things I should point out. One of the packages sent USPS Priority contained a Spyderfly and could have very well been confiscated by German customs, not an excuse, but I was unaware of German knife laws at the time. The USPS Express mail package was valued at over 716.94. Click this Link and you will note that line number 7 under "Observations" clearly states : Germany will not accept any Express Mail International or Priority Mail International insured item valued at more than $500. Items valued at more than $500 will be returned to sender. The package was never returned to me, a true heartbreaker as one of the knives was a Paramilitary 2 w/CTS-20CP and gray G-10!

With regards to compensation, IIRC, I provided that Paypal Invoice that I had sent to the customer as evidence of value.

Here is a link to USPS : https://www.usps.com/ship/file-insurance-claims.htm
This will give you a good idea of the time frames you have to wait to file, etc. Read through this link carefully. You want to have all your ducks in a row before filing a claim, heck, even before you send the package.

Some thoughts as to whether or not "...if it is worth it." Can you afford to lose the knife AND the money, if not, then insurance is probably a good option, depending on how often you send insured packages out. There are other options for insurance other than USPS. I don't use them, but they are out there and can be found on Google. I can't speak for reputations, reliability, etc on these third party insurance companies, that's another Google search.

My biggest complaint, not that I am complaining, is the time frame. It took over a month to see the check for 500.00 (the 40.80 was refunded to me at my local post office). I officially got the ball rolling on 8/11/2011 and the check was printed on 9/26/2011, but it was printed and sent to me.

Hope this helps.

Rob
 
The way I see it is similar to OP. Under say $200, I don't mind sending out w/o insurance. I have been fortunate in that I have never had a package lost. However, over $200 I am not willing to take the risk. The added benefit of insurance is that the receiving party generally has to sign for the package. This adds a level of security that I like.

That said, the insurance fees that USPS charges are outrageous. It amounts to around 2% of the insured amount. That means, in order for me to break even, 2% of my packages have to be lost and I be able to provide proof of value of the contents. Think about that for a minute USPS is basically saying (thru its pricing) that a loss rate of 2% is acceptable. Also, keep in mind that traditional insurance schemes (companies) have administrative and selling costs that they have to pay; USPS does not (or at least not in addition to selling me postage on my item.) I guess when you are running a losing venture with no hope of ever recovering you'll try to scalp funds anyway you can.

TL; DR

Yes I use insurance for items exceeding $200 in value (or, in some cases, when I want the added security it brings.)
USPS is grossly overcharging for insurance
There isn't really another viable alternative.
 
USPS insurance is hardly steep, I just returned a Microtech Combat Troodon to the dealer, it was insured for it's full value of $480.00, the cost as I recollect, was under five bucks. I buy guns. knives, and ammo over the web, everything get's insured, everything...
 
always when it comes to higher priced packages. I've never had a problem with usps, but ups and ontrac have messed up a couple times and thank goodness for insurance, or else i'd be out of money. do it for peace of mind
 
I've been reading all of the horror stories with packages not showing up or damaged and I just won't take the risk. I insure for the full amount of the item with signature confirmation.
 
I think it is understated the extra amount of respect an insured package receives by the USPS. Just having that "Insured" on the label makes a lot of difference in the way they handle the packages. Insurance may be 2% on $100, but tails off dramatically after that.
 
I once lost a Al Mar Sere 2K in the mail.
I filled out an insurance claim form.I also needed.

copy of reciept
copy of my PP and CC account, showing funds were withdrawn
insurance reciept

It took about 3 weeks but I got every penny back that I claimed when I sent the item.

I was really surprised at how painless and fast the whole procedure was.

I always insure everything over $40.It puts a warm fuzzy feeling in my tummy.
 
knifeswapper said:
I think it is understated the extra amount of respect an insured package receives by the USPS. Just having that "Insured" on the label makes a lot of difference in the way they handle the packages.
Click to expand...

I agree with this bit and actually meant to put in my post above. It definitely gives USPS an incentive to treat your package better. That said, USPS shouldn't treat one set of packages better then others.

knifeswapper said:
Insurance may be 2% on $100, but tails off dramatically after that.
Click to expand...

I don't think this is true. I've insured packages from around $200 to about $1200 and its been a fairly linear 2% throughout that price range. I don't know if it gets cheaper (in relative terms) above $1200 but 2% is what I've seen used throughout.
 
For me it is like insurance on a rental car. If you rent once a year, get it. If you rent once a month, use your own insurance.

If you are shipping a $300 item once a year and it gets lost you are out $300.

If you ship 100 items with $3 insurance on each you are out $300.

I use usps online and pay with PayPal. It gives me free tracking. I personally think tracking is all you need.
 
I honestly think that when there is a blue insurance tracking bar code sticking onto your package the USPS personnel starting from the counter clerk down to the handler, sorter, and mailman will give extra attention to the parcel that it goes to the correct bin, conveyor belt, delivery truck and address. So definitely worth it. I'm happy to say that I haven't had to claim any lost mail.
 
ooitzoo said:
I don't think this is true. I've insured packages from around $200 to about $1200 and its been a fairly linear 2% throughout that price range. I don't know if it gets cheaper (in relative terms) above $1200 but 2% is what I've seen used throughout.
Click to expand...

Priority Flat Rate box (which is 90% of my shipments) online postage: $100 insurance inside the US is $2.30; $200 insurance inside the US is $2.85. Seems like the scale is not necessarily consistent, but it definitely tails off.
 
There seems to be some question as to the % premium that USPS charges at different insured amounts so I decided to test it. I entered a pair of addresses (one in GA and the other in TX) and priced up a small USPS flat rate box. I then changed the insured amount at intervals of $100 between $100 and $1,000. I increased the interval to $500 between $1,000 and $3,000. It seems that I was wrong with regard to my 2% premium assertion. The premium does however look fairly linear. It does taper off a bit at the higher end of the range but is generally contained in a 2% to 1% range.

Please see the graph below:

d4g1R.png


Data:

ZxqaN.png
 
I have bought and traded wrist watches for 8 years now as a serious hobby. I've sent dozens of packages mostly in the U.S. but throughout the world. I have never had to make a claim on insurance but I've heard it is difficult. The most important item is DELIVERY CONFIRMATION. This saved my butt one time. I copied and pasted the exact address of a buyer from PayPal. after two weeks and no delivery, the buyer was becoming a problem. I showed him the address I sent it to and he stated that was the wrong address. Why you wouldn't have your correct address on your PP acct is a mystery to me.

Long story short, I agreed to work with USPS to find the package. After 3 months of searching, it was found in a dead letter bin in AZ where for some reason they couldn't read the return address. The only way they found this package was by the number on the Delivery confirmation sticker.

So, I learned two lessons. Always use Delivery confirmation and always put a PP receipt or some contact information in the box.
 
Seven1Niner said:
I honestly think that when there is a blue insurance tracking bar code sticking onto your package the USPS personnel starting from the counter clerk down to the handler, sorter, and mailman will give extra attention to the parcel that it goes to the correct bin, conveyor belt, delivery truck and address. So definitely worth it. I'm happy to say that I haven't had to claim any lost mail.
Click to expand...
Makes sense. The blue ones go on packages insured for $201 and up, they are also suppose to be signed for.

Also, just an fyi to those who may not be aware. Anyone who adds signature confirmation to a package insured for $201+ is wasting $2:thumbup: If you add delivery confirmation to signature confirmation, thats another waste as sig confirm is also trackable and of course gets you a signature. The PO people should tell ya that but some wont.
 
Not only do I pay insurance but I mummify the box in tape. A few extra bucks, at the most, and a few extra pieces of tape are well worth the possible loss if something ever happens, IMO. After paying insurance and DC, USPS is still cheaper and faster than UPS ground service. Having worked at UPS as a package sorter for 5 years, I can tell you that anything could happen to your package going through the "brown" system. Boxes get thrown, dropped, stacked and jams happen on the belts all the time.

On the other hand, from what I've read, things can happen in the USPS system as well. The reason I still choose USPS over UPS is because after paying for insurance and the extra tape, it's faster and usually by half the time, in my experience. Who doesn't want their knife to show up faster while having the piece of mind that comes with insurance.
 
The less you ship, the more insurance is worth.

I ship allot at work (about 20% of my business is online sales). Several years ago I decided I would "double pay" the insurance with half going into an account until I had enough put aside to cover about three average sales, then I quit buying insurance. It took me not quite 3 months to accrue the money. Its like making 12 more sales a year. That's good business.

If I sell you something personally however, it WILL be insured. I don't sell enough personally to even think about self-insuring.
 
On higher value items, use registered mail, insured. It is MUCH MUCH safer and considerably cheaper. For instance, this just came up, guy sold me a $5000 plus item, sent it express mail insured, cost him about $55. We had an ebay dispute, he lost, I sent item back registed insured for over $5000. Cost me about $27. You'd have to figure the break even point. Downside is registered mail is quite a bit slower but much surer of delivery. It is how almost all diamonds are mailed, for instance.

BTW, I've been involved as the addressee with at least 3 lost items that were shipped insured USPS. Two broke, one (a shotgun) disappeared.......all 3 sellers collected on their insurance from USPS with no problems. None of these were registered.
 
You must log in or register to reply here.
Back
Top