Apr
22
2010

Do You Ship Packages Valued Over $100? Save Money Now!

Saving Time & Money

We take for granted that everyone knows that they are overpaying when they declare a value for coverage with the shipping carriers, such as FedEx and UPS. We also assume that everyone knows that they are overpaying when insuring with the United States Postal Service (USPS). If this information is not common knowledge, hopefully this article will open your eyes.

FedEx & UPS Declared Value Rates

The declared value rate structure for FedEx and UPS looks like this:

Declared Value Cost
$0-$100 FREE
$100.01-$200 $2.10
$200.01-$300 $2.10
$300.01-$400 $2.10
$400.01-$500 $2.80
An so on….

Retail rates may be even higher. UPS & FedEx charges $0.70 for each $100 (or part of $100.00) of the total declared value, after the first $100 (they cover the first $100 free of charge). This rate seems rather reasonable, but the most important thing that most shippers forget about is that both carrier charge a minimum of $2.10 to cover a package with a value between $100.01 – $400!

If you had a package valued at $450, you would subtract the $100 free coverage. This leaves $350 to be covered (4 units) x $0.70 for a total cost of $2.80. Similarly, a $150 package ends up costing you $2.10 to cover!

USPS Insurance Rates

The United States Postal Service has a different kind of rate structure. It looks like:

Declared Value Cost
$0-$50 $1.75
$50.01-$100 $2.25
$100.01-$200 $2.75
$200.01-$300 $4.70
An so on….

These insurance fees make it almost impossible to insure a package valued anywhere near $100. A $79.00 value package would cost you $2.25 to insure it; almost 3% of the package value!

The Solution

Putting aside that this is a Shipsurance blog, the best option is private shipping insurance. With private shipping insurance, you can not only save money on your shipping insurance fees, but your claims are handled much quicker and the entire process is easy to manage.

Using our service as an example, if you are a regular shipper and sign up for open coverage with us, you can expect rates that are 50% – 90% less than the carrier rates listed above. The great part about this is you can continue shipping with the carriers you are used to on you normal account and still insure with us.

For example: A median rate with Shipsurance is $0.30 per $100 for FedEx & UPS and $0.50 for USPS. Using these numbers and a shipment valued at $150 your savings would be:

FedEx or UPS: Your cost would be $0.30 instead of $2.10—a savings of 85%!

USPS: Your cost would be $0.50 instead of $2.75—a savings of 82%!


We hope that this article shows you the benefit of 3rd party shipping insurance. It is a tremendous savings to your bottom line with little to no additional overhead. Besides the savings, a great, paperless claims experience is a welcome side effect!

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