How to Add Shipping Insurance


Shipping insurance is available through each of the three main package carriers in the United States. FedEx, UPS and the U.S. Postal Service (USPS) all have their own methods of offering insurance, as well as adding it to your order with applicable charges. After you are able to properly assess the total amount of shipping charges for a parcel, you can pass these costs on to customers when applicable, and keep better tabs on the distribution of your budget to specific shipping costs.

Add Shipping Insurance to Your Parcel

Determine your shipping carrier for a parcel or file that requires insurance. If you are shipping for a company, check with a superior to find out if the company has a preferred carrier.

Determine the amount of shipping insurance needed for your item. If you are shipping merchandise, a shipping invoice stating the purchase price is sufficient proof of value should you need to file an insurance claim.

Fill out the address of the package recipient on PS Form 3813 for an insured value of $200 or less, and PS Form 3813-P for an insured value of $200 or more, if you chose the USPS as your package handler. The USPS clerk runs the form through a printer that lists your parcel value on the ticket and the insurance cost. As of January 2011, USPS insurance starts at $1.75. After a $4.50 charge for $200 of coverage, it goes up $1 for every $100 worth of insurance thereafter.

Declare a value on your UPS shipping form. All UPS packages are automatically insured up to $100 as of January 2011. After the $100 level you are charged 75 cents per $100 of value, up to a maximum value per package of $50,000.

Declare a value on your FedEx shipping form. As of January 2011, FedEx insures up to $100 automatically.

Multiply by 75 cents each $100 of value attributed to your package. Multiple by $9.07 each pound of your package. The greater of these two numbers produces your declared value charge, with the exception of FedEX U.S. Express Package Services, which have 75 cents per $100 of value on any parcel.

Retain your receipts and all paperwork related to your parcel in case an insurance claim needs to be filed.

Add Shipping Insurance Costs to Shipping Charges

Go to the shipping calculator on your package carrier's website. Each of the major carriers has a form that allows you to calculate shipping rates online.

Enter the declared value of your item on both the FedEx and UPS sites to receive a comprehensive shipping quote, including the costs of declared value. USPS insurance calculations require the use of Click N' Ship. If you do not want to print postage online, use the shipping calculator to obtain the actual postage costs, calculate your insurance costs independently and add the two numbers.

Add insurance costs to your present shipping charges by editing your current shipping totals to reflect the changes in postage price that insurance creates. If you sell on a pre-existing website with flat shipping charges per item and want to be reimbursed for insurance, roll the insurance cost into the selling price of your item by adding the insurance cost to the item price.

Tips & Warnings

  • Major e-commerce sites such as eBay and no longer feature the ability to assess insurance costs separately from regular postage charges. But if you encounter a smaller venue that does, input the total cost of insurance through your carrier of choice into the insurance or extra services option on an invoice.

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