USPS vs ShipCover Insurance – Which Should I Use? Weighing in on Coverage Reliability and Cost!

Which is better – USPS Insurance or ShipCover Insurance for eBay Shipments?

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 than USPS insurance on cheaper items.
  • 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.


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18 Responses

  1. Pascale says:

    I agree shipcover is more smooth but 4 claims later and they won’t let me use their insurance. Also you cannot name the $ amount past the item cost as you state, eBay will not let you insure an item for $60 if it sold for $50

  2. pablo estefan says:

    The USPS now has online claim filing. I filled it out for a damaged ebay item and got a check less than a week later. Seems the USPS is feeling the heat of ShipCover and wants the Ebay insurance business, too, by making claims easier to make and paying out claims without a hassle.

  3. Catherine Andrews says:

    Dear Sir: Your thoughts on USPS compared to Ship Cover for insuring items are interesting, and valuable.

    I need to point out one area you need to correct.

    When a seller uses Ebays’s Click and ship, which mandates the use of Ship Cover, he can only insure the package for the amount of the merchandise. He cannot add in the shipping cost. The automated system will not allow it.

    This makes Ship Cover a poor choice if the item has a high shipping cost. I recently mailed a package to England, and paid as 35 to ship it. The item was only worth about 25.00. It now appears to be lost, and if that proves to be the case, I lose the 35.00 shipping fee. The USPS will refund shipping costs, but Ship Cover does not.

  4. Aerin says:

    USPS is a much better choice! If you file a claim online, you do NOT need to go to the Post Office, the claim will usually be paid in less than a week, and the shipping cost will be included (unless only part of the shipment was damaged). I have had nothing but good experiences with USPS, and I see no advantage at all to using ShipCover.

  5. David Lubin says:

    I wanted to ship to Hong Kong and insure the package but it popped up the USPS does not insure to some countries. SO I went with ShipCover, but my label would not print. I voided it, but then tried again and got the same response, so will have to wait for TWO voids to be reimbursed AND take my package to the post office to see if insurance is covered, and if it is, probably pay more for postage since I think PayPal gives a USPS discount. I also had a claim with the USPS and was paid in a very timely manner.

  6. Craig says:

    I have to say that I’m extremely disappointed with both insurance coverages. I would have said that I prefer and use ShipCover until they have recently blocked me from making any further purchases. I called ShipCover and was told that I’m blocked indefinitely due to filing too many claims?? I’m confused, they have no problem taking the money for the insurance on shipping…..they just have a huge problem if you file claims due to lost/damaged items??? I thought that was what insurance is for?

    As for USPS, I’ve had more bad luck than good. I have waited for more than 8 months on lost package claims that I paid insurance on. I have been denied claims through USPS for packages they have lost or never delivered stating they have received confirmation from the destination country that the package was delivered when in fact it was not. I have learned through the long run that purchasing insurance through the USPS is doing nothing more than protecting the USPS. I’m extremely disappointed with the lack of customer service, rude USPS employees, and their overwhelming carelessness of handling packages and providing some kind of customer service. In the past five years I have purchased more than $250K a year in postage through the USPS and have been told by my local post master that they really don’t care if they have my business or not. End result is I’m shopping for other alternatives all together and hope that one day the USPS will either seriously change their ways or go out of business. I stand firm on the fact that companies like mine are what keep the USPS in business and when they screw you over time and time again more companies like mine will also do away with the USPS.

    I hope this is good information for those fellow individuals that ship goods they sell online. At the end of the day I have nothing good to say about ShipCover or USPS!

    P.S. Neither company cares if someone is happy with them or not….so beware and be careful!

  7. Jan says:

    Yes a few claims after all that are covered and ship cover will no longer cover. I have bought the insurance for all my overseas packages and they paid our 3-4 times after hundreds of packages now all of a sudden they will not cover my sales. I say do not give them any money seems that if they have to pay anything they will not cover you. I am in the wrong business I want to be ship cover take peoples money pay a time or two and cancel. USPS is no better, I guess on high ticket items ups or fed ex is the best.

  8. Craig says:

    I have been trying and they have their own insurance….so far it works well.

  9. Valentina says:

    Hi !
    The best options today for eBay sellers: ShipSaver insurance, you can find it in “APPLICATIONS” in the same line with Messages.

    ShipCover Insurance Co denied all my requests after a few claims during one year, because of broken (but extremely well packed) items .
    When I tried to insure package with ShipCover last time, I ALWAYS see this worning:
    “You are not eligible to purchase ShipCover insurance. For more information, please call toll-free 1-877-325-2462. you can also reach PIP at

    When I tried to call them, they even did not explain, but said: You are not eligible anymore, that’s it.
    Lost time and Lost money!

    Very not responsible and not professional + they NEVER REFUNDED SHIPPING CHARGE, even the package was lost., you have to open extra claim with USPS….so for what we need ShipCover insurance?

    Now I use SHIPSAVER eBay Insurance and this is really very responsible, very clear and very honest service, which insure USPS, including 1st Class packages !!! as well as FedEx, UPS and always refund FULL PAYMENT INCLUDING SHIPPING.

    The best insurance ever and the LOWEST RATES comparing with ShipCover (without shipping) and even USPS.

    To be honest, USPS does not refund money for BROKEN items, even it was insured, but ALWAYS refunded cost of a LOST package including shipping.

    Hope this will help to many eBay sellers.

  10. Terri says:

    Valentina, I just had the same thing happen to me. I’m now ineligible. Maybe they are in the wrong business of insuring the USPS items. So many things get lost and broken. We pay and pay for the insurance, but when it’s time for them to pay up, they cancel you. All insurance is a scam. Health insurance denies for this and that. Life insurance has all these stipulations. It’s crazy!

  11. Stan Ploar says:

    I had a couple high value items (laptops) that were damaged in shipment in 2013 and the USPS paid me in less than a week! I couldn’t believe how fast it was, and I did it all online! The USPS must be trying to fix their bad reputation of dragging their feet and making insurance claims a hassle. It was so easy it was amazing! I’ve never had a ShipCover claim but I heard it was painless and quick as well. I did hear that ShipCover did not cover internal damage, like a laptop being bumped hard and although there was no damage to the box the laptop suffered internal damage and didn’t work, but USPS does.

  12. Brad says:

    Just came to this site questioning the ShipCover insurance as well. I didn’t like the fees and it seemed sketchy to me. I did as Valentina suggested and used the ShipSaver app within eBay applications. You have click the “Apps Center” link (right side of screen) on the Applications tab of “My eBay” to get to it and set it up and install it. After that, it’s smooth sailing, and their rates are amazingly cheap (so far). I hope they stick around, as it will save me a ton of $ over USPS and especially ShipCover (way too expensive).

    Good Luck! Try ShipSaver! :)

  13. Larry says:

    I’ve had good experience with usps insurance. It seems to me shipcover is cheaper, at least in the first hundred which is what i’ve used them for – i have not made a claim with shipcover as yet. UPS insurance is fine up to $100, but over $100 they use a contract insurer which has denied my claims stating that it was prior damage, or the packaging did not meet ups requirements, etc. As you may know, UPS packaging requirements can be expensive and difficult to meet when you ship a lot of different, or one-off items. Now that rates will be based entirely on dimensions, it will probably become even more burdensome. I think you have a better chance of collecting from usps for claims over $100.

  14. robert says:

    My usual problem is not discussed here. my common problem is USPS not delivering the package at all and saying they did, thereby nullyfying my insurance claim on the false grounds that the tracking info shows it “delivered.” and they say “require an signature next time” which is not viable because of the extra cost and most buyers won’t be home to sign.

  15. robert says:

    OMG this is so untrue: “To be honest, USPS does not refund money for BROKEN items, even it was insured, but ALWAYS refunded cost of a LOST package including shipping.”

    as i said all ready this is the opposite of my expreience. USPS NEVER pays for lost items because the typical “lost”item is misdelivered or stolen by dishonest doleivery people,but ALWAYS recorded as “delivered” and therefore not eligible to collect the insurance.

  16. Matthew says:

    Things could have changed certainly, but the last time I had an Ebay package lost by USPS (insured) it was impossible to get my money back. I had to go into the post office, the people there were completely ignorant, and because I had done the insurance over the internet they said they had no way to help me. The post office manager promised to call me back and never did, and I gave up. It was not an expensive item, maybe $15 including the shipping cost. To be honest this was years ago so maybe it’s better. But rule of thumb, people who work for the government are ignorant, things run by the government are inefficient and incompetent.

  17. auswelllife royal jelly says:

    Do you have any video of that? I’d love to find out more details.

  18. Alanna says:

    The USPS has changed their policy and now do NOT reimburse for postage. Sellers are gonna get took on this no matter what. Etsy Shipsurance does pay the postage back.

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