Is Shipping Insurance Worth It? Costs, Claims & Liability

Shipping insurance is worth it when the cost of losing or replacing a package is higher than the cost of insurance. 

It makes the most sense for items worth over $100, fragile or expensive products, and international shipments, where loss or damage can be more costly. For low-value packages, the carrier’s included coverage may be enough.

To decide, compare your item value, carrier coverage, shipping risks, insurance cost, and claims process. 

Easyship's shipping insurance prices coverage at 1% of shipment value for domestic orders and 1.5% for international ones, up to $10,000 per package, and you can turn it on with one click at checkout or automate it with a shipping rule (for example: insure automatically when order value is $100 or more).

Is Shipping Insurance Worth the Cost for What You Ship?

Insurance should cost less than the risk it removes. That's the entire test.

Easyship prices insurance at 1% of declared value for domestic shipments and 1.5% for international ones, with full policy coverage included at that rate. On a $120 item, that's about $1.20 domestically. On a $500 international order, it's $7.50.

Compare that to what you're exposed to without it: FedEx and UPS both cover only the first $100 of a package's value for free. Anything above that, you either pay for declared value coverage (and still have to prove fault) or you absorb the loss entirely if something goes wrong.

Run the math on your own average order value. If your typical order sits at or below $100, free carrier coverage may be enough. Above that, the premium is usually smaller than a single unprotected loss.

Does Shipping Insurance Actually Save You Money?

Here's a simple way to check, using your own numbers instead of a generic industry average.

Say your store ships 500 packages a month, averaging $120 in declared value each.

Insuring everything domestically through Easyship: 500 packages × $120 × 1% = $600 in monthly premiums.

What you're protected against: Without insurance, only the first $100 per package is covered by the carrier by default, and that $100 requires proving the carrier was at fault. Every dollar above that, on every package, is money you'd absorb personally if something goes wrong. At 500 packages a month, even a small number of losses erases the entire premium and then some.

The USPS Office of Inspector General reported at least 58 million packages stolen nationwide in 2024 (Source: USPS OIG), so this isn't a hypothetical risk. It's a real number, applied across a real volume of parcels every year.

Run this with your own shipment count and average order value. The premium is a fixed, predictable line item. An unprotected loss isn't.

Does Your Carrier's Coverage Protect You, or Just Cap What they Owe You?

USPS, UPS, and FedEx all include $100 of protection by default. Beyond that:

• UPS requires a signed high-value shipment summary for any declared value over $1,000, and still only pays if UPS is found responsible.
• FedEx will deny a claim if it decides the package was packed improperly, even if the item was genuinely damaged in transit.
• USPS insurance is real insurance, but it's mail-class dependent, and some services (like Priority Mail Open & Distribute) don't include it at all.

A policy that isn't tied to proving carrier fault, and that works the same way regardless of which courier delivers the package, removes this variable entirely. Easyship's insurance applies across 550+ courier services, including a seller's own carrier accounts, so coverage doesn't reset every time you switch carriers to save on a rate.

How is Shipping Insurance Different from Carrier Liability?

Shipping insurance is a paid policy that reimburses you for the declared value of a package if it's lost, damaged, or stolen, no matter who caused it. Carrier liability, sometimes marketed as "declared value," is a cap on what the carrier will pay if the carrier is found at fault.

The distinction matters more than most sellers realize.

• FedEx: Declared value is not shipping insurance. You must prove FedEx was at fault and the package was properly packed. Payouts are limited to the lowest of the repair, depreciated, or replacement value.
• UPS: Includes $100 of default liability. You can declare a higher value, up to $50,000 or $70,000 for eligible services, but this is still carrier liability, not insurance.
• USPS: Includes $100 of insurance with Priority Mail, Priority Mail Express, and Ground Advantage. You can buy up to $5,000 in extra insurance, with claims generally required within 60 days.

For a full breakdown of what counts as insurance versus liability, see Easyship's guide to the basics of shipping insurance.

How Good is Claims Support When Something Actually Goes Wrong?

This is the part sellers underweight until they need it. A cheap policy with a slow, paperwork-heavy claims process isn't actually cheap. It's a second job.

Compare the process, not just the price:

• USPS gives you 60 days to file, and processes claims after that.
• FedEx requires a written claim and a full investigation before it pays anything, with no fixed turnaround promised on its own site.
• Easyship's claims process has no forms: you file in the dashboard, and claims are approved in 2 to 3 business days, with all claims resolved within 7.

If you're already juggling customer messages about a late order, a claims process that adds another multi-week wait is its own cost, even if the premium was cheap.

Does the Policy Cover Damage, Missing Items, and Lost Packages, or Just One of These?

"Shipping insurance" isn't one thing. Some policies cover loss but exclude damage. Others cover damage but exclude theft. Read the fine print before you assume you're covered for all 3.

A useful checklist when comparing policies:

• Does it pay out for a package that never arrives (loss)?
• Does it pay out for an item that arrives broken (damage)?
• Does it pay out for a package marked "delivered" that the customer never received (theft)?

Easyship's coverage applies to loss and damage, up to $10,000 per shipment, across most product categories including jewelry and artwork. Confirm the same 3 boxes are checked before you buy any other policy.

If you're dealing with a missing package right now and need to know who's responsible for it, see Easyship's guide on filing a claim for an uninsured shipment.

Do Expensive or Rare Items Need More Protection than Everyday Orders?

Yes, and the reasoning is simple: the free $100 that USPS, UPS, and FedEx include covers a $20 phone case the same way it covers a $2,000 watch. It doesn't scale.

If you sell electronics, precious metals, art, or anything with a high replacement cost or a long lead time to restock, the gap between "$100 covered" and "actual value" grows fast. FedEx even runs a separate high-value jewelry program that allows declared values up to $100,000 domestically, specifically because standard coverage doesn't come close for that category.

For these categories, insurance isn't a nice-to-have. It's the difference between a bad week and a write-off.

Is Shipping Insurance Worth it for International Orders?

International shipping insurance decisions changed materially in the past year, and most sellers haven't caught up.

Executive Order 14324 suspended the $800 duty-free de minimis exemption for low-value shipments from all countries, effective August 29, 2025. That suspension has since been extended, and as of June 2026 it's been made indefinite, including for shipments moving through the international postal network (Source: Federal Register).

In practice, this means a package that once cleared customs duty-free under $800 now owes duties and needs a proper customs entry, regardless of value (Source: U.S. Customs and Border Protection). More documentation and more customs touchpoints mean more chances for a shipment to get held, delayed, or damaged in additional handling.

That raises the value at risk on every cross-border order, not just the expensive ones. It's a reasonable moment to insure international shipments by default, even if you're selective domestically.

Who is Responsible When a Package Goes Missing?

Responsibility depends on where the package went missing. If it is lost in transit, the sender can usually file a claim with the carrier. If tracking shows “delivered,” getting compensation from the carrier may be harder.

Shipping insurance simplifies the process. For eligible claims, it can cover lost or damaged packages without relying only on the carrier’s standard liability.

If a package goes missing, check the tracking, contact the carrier, and file an insurance claim if the shipment is covered.

How Do You Choose the Right Shipping Insurance for Your Store?

Use the 6 checks above as a scorecard for any policy you're considering:

1. Cost. Is it priced as a percentage of value, so it scales with what you ship?
2. Carrier coverage. Does the policy work the same way across every carrier you use?
3. Claims support. Is the process fast and free of paperwork, or a multi-week investigation?
4. Coverage scope. Does it pay out for loss, damage, and theft, or just one?
5. Item value. Does your product mix justify coverage above the free $100 floor?
6. International exposure. Does the policy account for the current customs rules, not the old ones?

If a policy scores well on all 6, it's worth adding. If it only wins on price, check the other 5 before you commit.

Easyship covers this checklist by default: 1% domestic and 1.5% international premiums, up to $10,000 in coverage, claims resolved without paperwork in a matter of days, and coverage that applies whether you ship through Easyship's network or your own carrier accounts. You can turn it on per order or automate it with a shipping rule so it never depends on remembering to click a box. For a deeper walkthrough on setting thresholds by order value, see why shipping insurance is better with Easyship.

FAQs

Should I get shipping insurance for every order? 

Not necessarily. If your average order value is at or below $100, the free coverage that USPS, UPS, and FedEx already include may be enough. Above $100, or for international orders, insurance usually costs less than the risk it removes.

What is the shipping insurance fee? 

It's typically a small percentage of the item's declared value, not a flat rate. Easyship charges 1% for domestic shipments and 1.5% for international ones, with no separate paperwork fee.

How long do I have to file a claim for a lost package? 

It depends on the provider. USPS requires claims within 60 days of the mailing date. Easyship's process is faster: claims are typically approved within 2 to 3 business days.

Who is responsible for a lost package, the seller or the carrier? 

It depends on where the package went missing and whether it received a final delivery scan. Carrier liability claims require proving the carrier was at fault, which is often difficult. A no-fault insurance policy removes this question by paying out regardless of cause.

Does shipping insurance cover international shipments? 

Yes, through most providers, though rates are usually higher than domestic coverage. Easyship prices international coverage at 1.5% of declared value, reflecting the added customs and handling risk on cross-border orders.

Does shipping insurance cover porch theft, or only packages lost in transit? 

That depends entirely on the policy. Carrier liability programs generally treat a package marked "delivered" as delivered, regardless of what actually happened at the door. Check whether your insurer explicitly covers theft after a delivery scan, not just loss in transit.