It seems every product comes with some sort of insurance or protection package you can select at the point of purchase. Are you the person that insures every possible product or are you the type that shrugs off insurance? If you are a shipper, shipment insurance is a non-negotiable and a way to mitigate risk. With the different options available, it’s vital to know a few insurance basics to help pick the best insurance policy for your parcel shipments.
Bare minimum carrier insurance
Carriers have a default insurance option due to the Carmack Amendment, a federal law proposing a single set of rules to govern the liability of any public carrier who lost or damaged goods they were transporting. As a bare minimum insurance, common carriers like UPS and FedEx will automatically cover up to a value of $100 against lost or damaged shipments with no declared value. If a value above $100 is declared, you waive your right to this default insurance coverage. A word of warning, sometimes even this isn’t guaranteed. If these shipments are deemed improperly packaged or you have specific waivers in place, you are at risk of being denied a refund.
Tailored policies through carriers
Contracts can extend or overrule any provisions of the Carmack Amendment. Carriers will work with shippers on an individual basis to tailor an insurance policy that’s appropriate for your business needs. UPS Capital is a flexible parcel multi-carrier coverage option. You can insure all your small package shipments under one policy, regardless of your approved transportation carriers. UPS Capital provides door-to-door coverage that goes beyond standard carrier liability limits to insure cargo completely.
A carrier might offer to include the cost of insurance into their shipping costs, but this doesn’t automatically mean their coverage is the best option. Just like the cost of shipping, shipping insurance has risen steadily over the years too. For shipments with a declared value exceeding $100, UPS will charge $2.70 and FedEx will charge $3.00 as a minimum. Plus, approximately a $1 charge for every incremental $100 on top of the base. That can get pretty confusing. Third-party shippers offer a straightforward process that makes sense for your business and often offers more comprehensive coverage at a significantly lower rate. Most third-party shipping insurance companies don’t charge a minimum and offer rates anywhere between $0.40 to $0.55 per $100. Carriers have little concern for being competitive in the insurance market, but third-party shippers focus solely on providing competitive insurance solutions.
Create a bundle
Today’s world is all about bundling and unbundling. Combining the right insurance policies may give you the best coverage, the best discount, and the most favorable payout. The main reason businesses look to bundle is for the added convenience of not having to juggle multiple insurance policies with different companies. Bundling makes managing your policies easier.
Selecting an insurance policy is one way to reduce costs and avoid unnecessary financial risks. Becoming complacent with your current insurance policy could mean overlooking better rates or discounts from other companies. Take the time to shop around and compare policies. If you are seeing a lack of payout or a slow processing for lost and damaged shipments, Share a Refund can handle that for you using the most sophisticated lost and damage claim filing service available to your business.