USPS vs ShipCover Insurance – Which Should I Use? Weighing in on Coverage Reliability and Cost!
eBay has recently offered a new option for insurance service when printing USPS postage / shipping labels for your auctions. There is really no information to be found on which service does what, or which is insurance option might be better. Here I’ll give a quick but thorough rundown of what each has to offer:
USPS Insurance – The Old Option
- USPS’s own insurance seems to be slightly more expensive on cheaper items (roughly below $50), but slightly more expensive on more expensive items (above $100-200).
- Claims take weeks at minimum, or possibly months to pay out, and the general consensus of users appears to be that USPS will drag their feet intentionally.
- USPS Insurance is backed by the government and has more credibility and history
- You’ll need to call or go to the post office (likely several times) and fill out paperwork in order to file a claim on a damaged or lost shipment.
ShipCover – The New Option
- ShipCover will be slightly cheaper on expensive items, but slightly more expensive if you are purchasing cheaper coverage.
- From reading the actual testimonials of users, it appears ShipCover is much faster and is more reliable than USPS in paying out claims. This could be because it is a newer service and they need to build trust, but regardless comparing the experiences of users on various forums around the internet, ShipCover seems to offer a much better service in actually paying out claims when you need them.
- Labels printed with ShipCover insurance are NOT labelled as insured. The only person that knows the package is insured is you and eBay. Your buyer won’t know that insurance was purchased. More importantly, anyone handling the package in transit won’t know, which could keep it safe. (Only higher value items would be likely to be insured — a better target for theft).
- ShipCover is not backed by the government and is not a legal insurer. On the shipping label page on eBay’s website, when you are selecting the insurance type, you can click to view the legal terms of ShipCover, which seems to be a California based business. Basically what the legal speak says is that ShipCover can go bankrupt at any time and all pending claims would dissolve into thin air so you would be out of luck. For a government insurer like USPS insurance, this risk is not present.
- Filing of claims is handled online through forms on eBay/Paypal and is quick.
As a final sidenote–the main issue some users seem to have is whether or not postage fees are covered–remember, you need to enter the total coverage amount you want to purchase, regardless of which service you use. If you sell an item for $50 and postage is $10, you must enter $60 as your coverage amount. You’ll also have to pay slightly more for the additional coverage.
I would currently have to recommend ShipCover over USPS Insurance when shipping on eBay. This is solely because claims are currently being paid out reliably and quickly, while on the other end of things I have read widespread testimonials that USPS drags their feet for weeks or months before paying out claims (if ever).
As long as ShipCover continues to keep up a reputation of fast claim payouts, they are the easy choice — even if it will be slightly more expensive.