In an e-commerce business, shipping is an important factor that may build or take down your business. Without having the right shipping strategies, you will not be able to satisfy the customers and build your brand. And, what if the product goes missing or is damaged while it is in transit?
This is where shipping insurance comes into play. Shipping insurance is a service given by the insurance companies to protect senders from financial losses whose couriers are lost, damaged, or stolen while in transit. This simply means that the insurance company will pay your financial loss caused due to the loss or damage of your parcel during shipping.
In this article, we will explain what is FedEx shipping insurance and when to consider the insurance for your WooCommerce shipments. We will also cover different aspects of FedEx insurance and also it’s limitations. Also, we will explain how the WooCommerce FedEx Shipping Plugin will help you calculate insurance.
What is FedEx Shipping Insurance?
FedEx is a popular carrier which ships 14 million packages on an average to different parts of the world daily. The carrier offers insurance to handle all types of situations, which includes theft, lost or damaged. But how much does it cover, and what is the cost? So, it is very important to understand the pros and cons of FedEx insurance which will help you decide what role does it have in your business.
The first $100 of insurance doesn’t cost anything. But if the value of the package is higher, you can purchase additional insurance to cover the losses. Purchasing the right amount of insurance is important. This is done by stating a Declared Value.
FedEx Declared Value
In simple words, “Insured Value” is referred to as the “Declared Value”. But, the declared value is not insurance coverage. The declared value of an item represents the maximum liability(responsibility) for the package in the case of loss or damage. For shipments without a declared value, FedEx’s maximum liability is $100 for losses or damages at no cost.
If your product cost is more than $100, then you will have to purchase additional insurance to cover the losses. To purchase this additional insurance, you have to inform the carrier the value of the products that are shipped. At this point, there is no need for presenting any documents of other receipts. However, if you make a claim, these documents are necessary to confirm the value of the package.
When to Consider Insuring Your Products?
Insuring your products is a form of risk management which is mainly used to handle the risk of potential financial loss. There are a lot of reasons which may make you think about insuring your products so that even if there are some problems, it won’t affect your business completely.
When the owner of a business is free from the thought of losses, he will certainly give much time to the business. Such an owner can work better for increasing the profit. So, as a store owner who handles WooCommerce shipping, Shopify Shipping or even any other platform, it is important that you take care of your business.
It is always important to insure your products which are of high value and which are prompt to damages. For example, if you are selling glass materials, it is important that you insure these products as there is no other guarantee that the product won’t be damaged before it reaches the recipient. This applies to the products which are of high value as well.
Whichever carrier service you are using, it is important that you understand their terms and policies very well and how they provide the insurance to your packages. If you are a WooCommerce store owner and using FedEx shipping method, then you will have to use any plugin which will help you handle the FedEx shipping process. Also, not all plugins allow you to enable FedEx insurance.
The WooCommerce FedEx Shipping plugin allows you to calculate insurance on the basis of the order cost. If you enable the insurance option, the product amount will be sent to the FedEx as an insurance amount. Now, if some issues like damage or loss happen with the product, then FedEx will take care of the insurance.
Now, let’s see some aspects of FedEx insurance which will help you understand it better.
How Much Does FedEx Shipping Insurance Cost?
Let’s see how much does it cost for FedEx insurance. The cost of insurance varies depending on the type of service used.
FedEx SameDay Service: In this case, the maximum declared value is $2,000, and the additional cost for declared value is $3 for shipments up to $300.
U.S. Ground and Express Service, and International Ground Services: The additional cost is $3 for shipments valued up to $300. After this amount, the cost is $1 per $100 of declared value over $300.
FedEx Overnight and 2-Day Services: The maximum declared value per package is $50,000.
FedEx also requires a direct signature for a parcel which costs more than $500. So, FedEx will require a signature from the package receiver when the package is delivered. The carrier will attempt to deliver again if nobody is available to receive the package.
How to Insure Your Package?
Once the item is taken to FedEx and it is shipped, fill in the declared value section of the shipping form.
Note: If you have multiple packages, you must include the declared value for each package separately.
Do not forget that if your package contains items with a cost less than $100, you don’t need to do anything to insure your package. Your package is automatically protected.
Also, for businesses shipping large numbers of packages, you can pack the items and have it picked up at your location. To do this, ensure that you follow FedEx packing requirements, which is crucial if you want to file a damage claim.
How to insure the manufacturing cost in the WooCommerce FedEx Plugin?
The insured value of a product can be defined on the individual Product page. As you can see in the image shown below, there is an option to give a declare the value.
Once the insurance amount is declared for a product, the plugin will send the amount to the FedEx servers. Based on this request the shipping rates will be shown. If you see in the video below, you would notice that the shipping cost changed as soon as the declared value was entered.
In the above video, we had taken only one insured product and showed you how the complete process is executed.
How to handle multiple insured products?
If you have multiple insured products in the Cart then the insured value be taken individually. The total insured amount will be added together and this value will be sent to FedEx.
Based on this value the shipping rates will be calculated. In the following images, you can see that we have two different insured products in the Cart. Moreover, the insurance amount of these products are different as well.
In the Debug Request, the total insurance amount will show up something like as shown in the following image.
This is the most efficient way to secure your products while availing the various FedEx Shipping services.
How to Make a FedEx Insurance Claim?
The insurance claim must be submitted online, via email or faxed to the FedEx claims department. It is better to file the claim online as you can get updates via email. Once you submit your claim, you need to get a case number for your claim so you that you can use it as a reference if you need to check on the claim in the future. Also, it is necessary to submit supporting documentation along with your claim.
In case of damage claim: Keep the box, packaging materials and other contents with you. They may need to be inspected by the FedEx claims department.
FedEx Express Service: If the service used was FedEx Express, claims must be made to FedEx within 60 days after the shipment is sent. In the case of FedEx Express international packages, claims must be made within 21 days of the shipment date.
FedEx Ground Service: If the service used was FedEx Ground, claims must be made within nine months of the delivery date,
Note: A lost or missing package must be reported within 60 days of the delivery date.
Once FedEx approves your claim, you’ll be paid the amount of the declared value. Any fee paid as the declared value and transportation charges will also be refunded.
Is FedEx Insurance Worth it?
When using FedEx as your shipping carrier, it is worth to verify which items are not covered or have limitations on insurance coverage. If your products fall under these categories, FedEx provides you complete security on the products and you don’t have to worry about your package.
According to the “Declared Value sections” of the FedEx Service Guide, items of extraordinary value may not be declared. So, it is also important to verify whether your products fall under that category.
Shipments (normal or freight) containing items like Film, Artwork, Antiques or collectible items, Jewelry, Precious metals, etc are limited to a maximum declared value of US$1,000. If you state a declared value that exceeds the amount allowed, you won’t be able to recover more than what is set in the FedEx rules and regulations.
If you have a proper understanding of FedEx insurance and other related factors, it will be easy to manage your business. Also, it is very important to have a clear idea of the products you are selling and whether it falls in any of the categories that might trouble you with the insurance coverage.
So that’s it! In this article, we have discussed what is FedEx shipping insurance and when to consider the insurance for your WooCommerce shipments. We also covered aspects like declared value which is an important factor to be considered in FedEx insurance also it’s limitations. Also, we explained what the limitations of FedEx insurance are.
We hope that this article was able to clear all the doubts that come up in your mind regarding FedEx insurance and other factors related to it. If you have any queries regarding FedEx shipping insurance, please do contact us. Our team will be able to help you out.