USPS insurance is fickle

Did you know that if you insure something through the United States Postal Service for a certain amount—say $3,000 to cover your five new laptops—and then they are lost or destroyed, the Postal Service retains the right to determine the worth of your goods? That happened to a man who just got offered $74 for five new Lenovo laptops. [Consumerist]
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17 Responses to USPS insurance is fickle

  1. dculberson says:

    Swainster, that’s terrible advice. I shipped a set of three projection tubes to England, and they got severely mis-handled. I had packed them very, very well, so only one of the tubes was damaged. The customer contacted the royal post, Royal Mail, who looked at the paperwork and saw that it was insured. They not only paid for a new tube, but also paid a technician to come out to his house and install it. (At a cost of several times the insured value.)

    While that shows a massive difference in mindsets on the part of the different postal services, it also shows that not insuring an international shipment radically depends upon where it’s going. At least if shipping to the UK, you most certainly do want to insure the package!!

  2. mzed says:

    I’ve had this issue with UPS, too.

    As a consumer, I figure if they sell me X dollars of insurance, then they owe me X dollars if they destroy my stuff. I could insure something that has little market value, but great value to me, for example.

    But no. A few years back, UPS just plain lost a box with a synthesizer of mine. When they asked me to prove that the synth was in the box, and that it was worth what I said, I was …um… disappointed. I wish I hadn’t had to get so exercised, but I did get my money out of them.

    How is it not fraud to insure something for a specific amount, and then not pay up when that thing is destroyed?

  3. absolutetrust says:

    I once had the manager of an Office Depot at which I’d shipped a UPS package pay my insurance claim ($2000 for wood sculpture) in cash because UPS was dragging their feet. I purchased the shipping services from Office Depot, and they bought the service from UPS, so I, technically, wasn’t a customer of UPS. I wonder if that’s Office Depot policy, or just a compassionate local branch manager. I’m glad that it was Office Depot going to bat with UPS rather than me, cause I don’t think I’d have gotten paid otherwise.

  4. kleer001 says:

    In Soviet America National mail service insures YOU!?

  5. Jack says:

    Insurance is fairly useless, but when I sell on eBay it’s offered as an option since people feel “secure”. In fact this all comes down to psychological security on the buyer’s part more than anything else.

    That said, the best “insurance” against packages going missing is knowing how to properly pack your goods. Past the internal packing materials, many folks don’t understand the basics.

    You know what saved me losing packages and actually helped speed up delivery? Buying a desktop label printer so 100% no package leaves my house unless it’s very clearly labelled. Seriously, one of the best investments I have ever made.

    Also folks, when placing labels I always slap on a piece of clear tape on top of the label to make sure it doesn’t fall off or get damaged in transit.

    And as far as packages being broken in transit, seriously learn how to pack the stuff. If it’s fragile, I wrap things in two layers of bubble wrap and then 3-4 inches of packing peanuts around that. Generally, if you feel like you can sit on the final packaged box without damaging what’s inside, that’s the way to go.

    All of that is a much better use of money to truly get the thing to you safe/secure.

  6. Anonymous says:

    UPIC and DSI Insurance (now under a different name, shipsurance? maybe) are great for insuring international packages outside of USPS. The packages aren’t marked as insured to help deter theft. These companies pay claims much more quickly and easily as well, and their rates are very low.

  7. Austinmodern says:

    USPS is really quite a trip. We sold a unique and rare Harris Strong lamp to a customer in France. Paid for tracking and international insurance (extra charges for both) of course the lamp didn’t arrive on time. USPS then told us that Tracking ends once the item leaves the US. Fun!
    Unfortunately the shipping for this large lamp via UPS and FED EX both was somewhere near 350 in ship charges so we felt compelled to use USPS.

    Happily it finally showed up, 3 weeks late, but it did turn up. Otherwise we would have been SOL as the post office had already explained to us.

    We do not ship to Italy. Period. Italy’s import laws pretty much ensure anything of value will be “confiscated” by Customs and you will never see the item again.
    DHL’s insurance was very good, they paid the two claims we had with them in full.

    We use UPS for all of our US sales currently. Less ship time usually means less time for damage in transit.

    It is true that “Tracking” via USPS simply means “we’ll note that it was officially dropped off, and if you’re lucky it might get scanned in at it’s final destination” but you cannot “track” a package via USPS the way you can with UPS.

    Frankly we miss DHL.

  8. Anonymous says:

    Been down that road! It was intensely surreal.

    The adjuster came out in his nice suit, looked at the $1500 piece of equipment they had pulverized and left on my doorstep, and said “OK, I’ll file a report tomorrow, you’ll get your cash”. He took the mailing label with him when he left.

    After a week I called in, and the lady on the phone said “you never filed a claim, we never sent an adjuster, and there is no report. You are making all this up to try to cheat us”.

    Luckily, I had met the adjuster at my workplace (because naturally they don’t do anything at an hour convenient to the person who they screwed) so I had video footage of the adjuster entering the building and a signed register from the front desk. And lots of witnesses to the whole thing, too, who were willing to sign affidavits.

    They paid up about four months after they destroyed my equipment, basically as soon as they figured out I was going to beat the living shit out of them in the courtroom. Besides the previously mentioned video footage and witnesses, I had pictures of the unopened smashed box on my doorstep and a recording of the phone conversation where they tried to deny knowing me.

  9. O_M says:

    …Reminds me of a situation back in ’93 with UPS. The company I was director of Tech Support for shipped a dozen NEC 6FG6 monitors – the big 21′ super-duper models that required two people to lift at all times – down to South Texas. The UPS truck they were in got caught in a flash flood, and all 12 monitors in their shipping crates got floated down the river. According to the local constabulary who found them and turned them in, two of them had gotten snagged on a tree that had fallen in the river, and nine of the other ten got snagged on them and remained in place. The twelvth went about another three miles down the river before it washed up on the banks.

    …Now, here’s where it gets messy. All 12 were shipped back to us, but when we finally got the claims adjuster out to look over the boxes they had dried out and fallen apart. The claims adjuster tried to claim – no pun intended – that we’d most likely “left them out in the rain” and was obviously trying to pull a scam on UPS. He then claimed UPS had no record that we’d shipped the monitors through them, and even went so far as to claim we’d forged the paperwork we’d had proving they’d been picked up originally *and* returned post-flood. When we pressed further, he threatened to ban us from using UPS ever again for filing false claims. Needless to say, our CFO took over our part of the investigation from there, because I was about to impale this particular vampire with a cordless screwdriver.

    …Naturally, we ended up having to go to court over the claims and the false accusations. However, the day before we were to first bring the case before the judge, UPS settled for the full amount of the claim and court costs, with a full apology, although we weren’t given any reason for the behavior of the claims adjuster. As we found out later from our regular UPS driver – a really nice lady we were on good terms with – it seems the claims adjuster and his supervisor had pulled this shit on a bunch of other similar damage claims brought about by that year’s South Texas flooding, including every single claim filed on packages shipped on the UPS truck that was carrying our dozen monitors. The reason? UPS would give a bonus for every claim rejected as it was cheaper than having to pay the claims, and at least this particular adjuster and his supervisor had the scam all worked out. Apparently they’d gone quite a bit overboard with it, and it backfired massively. Not unexpectedly, we never did see that claim adjuster again, and UPS never questioned any other claims we filed for the next three years I was with that company.

    …The punch line? This same claims adjuster went to work for a local insurance company, and tried to pull the same sort of “you’re trying to scam us” stunt on a 68-year-old grandmother whose home had been burned down thanks to the house next door burning down and the fire spreading. She successfully sued him *and* the insurance firm for libel and damages. Still, it wouldn’t surprise me if the schmuck was still out there, 16 years later, still screwing people over.

  10. Ed says:

    #16 – thank you very much for something very useful that I never knew about.

    I just looked it up, and DSI Insurance is now Shipsurance.

    Here are the websites of the two services you mentioned:

    I get really tired of USPS overcharging for insurance and then looking for every excuse not to pay a reasonable claim.

  11. daev says:

    Part of me smells fish (that would be my cynical side). They show scans of his receipt for insurance, but no mention of any receipt that establishes the value of the contents, which would surely be required for any insurance payout. Somehow I think we’re missing important pieces of this story.

  12. FoetusNail says:

    A friend owns a jewelry business, many years ago FedEx lost a shipment worth thirty thousand, which he had insured. They also told him there was no way for him to prove he had in fact placed 30K in jewelry in that shipment.

    Someone at FedEx, then told him he was better off not insuring his shipments, because all it did was serve to alert the thieves to the best packages to steal.

    He now ships everything either UPS or USPS, in plain often used boxes without insurance and has not lost a shipment since. He explained even if he did lose another shipment it wouldn’t make any difference since they won’t payout anyway.

  13. Austinmodern says:

    I understand that members of certain associations like the Tribal Arts Dealers Association has some sort of a sweet deal with Fed Ex where all packages are insured fully no questions asked.
    Nice coverage if you can get it.

  14. dculberson says:

    Mzed, it might seem like it should work that way, but that’s just not the case. The terms and conditions under which you buy the insurance are very specific. You can only recover what the items are worth and/or actually cost you, depending on the policy.

    I haven’t had a problem with any claims being denied, with FedEx, UPS, or USPS, but that’s because I pack them very well, document the value very well, and only claim what the items are valued at on the invoice.

  15. swainster says:

    Also you should never “insure” anything if you are shipping it internationally with the USPS. I was told by my post-office that as soon as it leaves U.S. airspace they no longer cover your shipment.

  16. madsci says:

    Ok, I ship by USPS a LOT. To the tune of $14k in postage last year, and over $6k so far this year. For domestic shipping, it’s very, very rare for them to completely lose a package. I’m not entirely sure that’s happened to me in the last four years, though I’ve probably sent a couple of replacement packages for things that got delayed, usually because of an incorrect zip code or something.

    I don’t ever use insurance on domestic packages because the loss rate is low enough that I’d pay more for insurance than to just absorb the loss myself.

    That said, for anything of more than a few hundred dollars in value I’d probably opt for UPS instead. I certainly wouldn’t have used Parcel Post. Priority is much faster and not that much more expensive.

    International stuff is another matter. Loss rates to most countries are not bad, but I do have consistent trouble with some – Portugal and South Africa come to mind, and a couple in South America.

    I’ve been told that putting any amount of insurance on international packages causes them to be handled separately and in a more accountable fashion. I don’t have enough data to know if that’s true.

    Again, a courier like DHL is a safer option, but for small packages it’s absolutely impossible to beat the mail for cheap shipping. I can get my products to Europe and Australia for less money and in about the same time as the same package going cross-country by UPS ground.

    You can also get third-party insurance on US mail (I know Endicia offers it through their software) but I’ve never used it because it’s never been offered on the countries I have trouble with.

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