Shipping insurance is an extra layer of protection that you buy to cover the value of goods that are being shipped. In case loss or damage occurs, you can be compensated if you have insurance. International shipping insurance is usually applied to goods that cross international borders.
When shipping goods internationally, it is worth noting that USPS will have a harder time staying on top of any errors. The reason for this is that mail may have to be handled by foreign postal services that are not under the direction of USPS. That is why it is always important to have international insurance even in cases where you can ignore it for local shipping. Here are a few tips that we at Sports Overnight believe will help you understand this concept.
1. It is not offered in all countries
USPS does not offer international shipping insurance in all countries. For USPS to offer coverage, that country’s mail system must have an agreement with USPS on handling, security, and the timelines for shipping. If the mail service in that country does not agree to the terms of USPS, then they will not be insured. These destinations currently include some African countries and Mexico.
If you want to know which countries are covered, the easiest way to achieve that is to visit the USPS website. You can also visit the local post office to find out the latest in international insurance. At other private carriers, you will also get insurance for international shipping. However, they also make a careful consideration about the country where you are sending the package.
2. Understanding what is covered
The coverage will change according to the type of insurance package you purchase. However, it generally protects against loss or damage in transit. For some items damaged during transit, the policy will only allow for their repair. For those who sell packages and ship through USPS, it may be up to you to conduct the repair.
In some cases, insurance will only cover the product’s cost and not the cost of shipping. It is thus important that you conduct careful research on your insurance to get one that has the lowest costs. USPS often updates its policies, and you should ensure you keep up with these changes.
3. Understanding when you may need international insurance
If the goods you ship through USPS are valuable or fragile, it is important that you have some insurance. For instance, anything worth over $100 should definitely ship with insurance. Always think about the actual cost of repairing or replacing the item before you decide not to buy insurance. For instance, a widget that costs $10 is not worth it. However, the cost of replacing an item worth $100 could do some serious damage to your bottom line.
4. The classes of insurance offered by USPS
If you ship internationally via USPS, you can purchase your cover at the post office or online. However, note that it is not offered for all countries as already explained above.
• Global Express Guaranteed
You will be automatically covered for up to $100 for any damage, loss, or repair of the package. You can also purchase additional coverage of up to $2,499.
• Express Mail International
Under this class of shipping, you are covered for any damage, lost, or missing items free up to $100. You are also allowed to purchase extra insurance of up to $5000 for your shipment.
• Priority Mail International
In this class of mail, you can get insurance coverage of as high as $5000 for as little as $2.45.
• First-Class Mail International
USPS will not offer insurance for this class of mail. For packages shipped via this category, you will need to use a third party carrier to qualify for insurance.
5. Shipping through a third party
If you are an online seller, you can choose to get shipping insurance through a third party. These third parties will usually offer insurance for countries that are not covered by USPS. They also offer insurance for mail classes not covered by USPS. The rates are usually quite low compared to those offered by USPS. Besides that, the coverage limits are quite high and can be as high as $30,000
A good thing about third party insurers is that they do not just protect you for the cost of the package. They will also cover you for the cost of shipping.
6. Self insuring
If you are an online seller and you do not want to be covered by a third party or USPS, you still have options. One of them involves self-insuring yourself. Simply put, you mark up the price of our products by as little as 25%. This extra amount will cushion you in case anything goes awry.
However, you still need to ensure that the items are affordable enough for the buyer to take an interest in them. This is a great way to give yourself peace of mind as well as a financial safety net when you have to offer compensation.