What Is Postal Insurance?

Postal insurance may save you money on lost or damaged items.
Postal insurance may save you money on lost or damaged items. (Image: us dollar symbols image by Brent Walker from Fotolia.com)

When using the U.S. Postal Service to send an item of value, you have the option of taking out insurance on your parcel. This gives you added security that you will not lose money if the parcel gets lost or damaged. It insures that you will receive the monetary value to replace the broken or missing contents of your package, if this does indeed occur.


You only need to insure your package for the value of its contents. It is left up to the customer to decide what the value of the parcel is, which is basically how much it would cost to replace it. Make sure you save any of the receipts for the merchandise when you ship it because if it does become damaged or it does not make it to its destination, you will need to show proof of the value of the item or items. If you purchase $100 worth of insurance on a $50 item, if it is lost or damaged, you will only receive the value of $50 so there is no need to over insure.


If the insured package gets lost or it reaches its destination damaged, the person who sent the package needs to initiate the claim by filling online or at the nearest post office. Once all the required paperwork is done, it is the person who was to receive the package that will be paid the value of the contents for the insured goods. You may need to provide pictures for proof of damage.


Postal insurance can be purchased online or at any post office. The price is reasonable and depends on the value of the package and the distance of the location it is travelling. Parcels can be insured up to $5,000 and can be insured going anywhere in the world the U.S. Postal Service delivers to. You will receive a delivery conformation either online or in the mail--it is your choice at the time you purchase the insurance how you would like to receive your conformation.

If you want the receiver to sign for the package or to send items of greater value there is a optional insurance purchase under "registered mail." This can be used for packages that have contents valued up to $25,000. This type of insurance is more expensive but the package is put under greater security from the time you hand it over to the postal worker until it arrives to its destination. The same conditions apply for proof of value and being paid for value only of the items that you insured if the package is lost or damaged. You can also receive conformation online or by mail.


Since buying and selling over the Internet has become increasingly popular, postal insurance has become subject to scams. One scam seen often is when a buyer purchases an item that he already has that is broken. Once the new item comes, the buyer reports that the item came in the mail damaged. He collects the insurance money and, by doing this, he receives the item for free. These types of scams will serve to escalate the prices to insure packages in the future.


The post office lists the obvious reasons that they would not be responsible for a claim under postal insurance such as, you failed to take out a postal insurance policy, you dropped it yourself and broke it and a variety of other common sense reasons. Then there are a few that are in a gray area and the post office may not honor their responsibility of payment. One disclaimer on the list states that it will not pay if the "fragile nature of the article prevented its safe carriage in the mail, regardless of packaging," according to the USPS. The disclaimer does not provide guidelines, however, on what is considered "a fragile nature of the article."

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