Most people assume the carrier covers their package if something goes wrong. That assumption is largely wrong — or at least far more limited than it sounds.
Here's what each major carrier actually covers, what they exclude, and when paying for more coverage makes sense.
USPS
Included free:
- Priority Mail and Priority Mail Express: $100
- First Class Package, First Class International, and most other services: $0
Additional insurance: Available up to $5,000 for domestic. International coverage varies significantly by service and destination country — some routes are insurable, others aren't.
The fine print:
- Domestic claims must be filed within 60 days of the mailing date
- International: 45 days to 1 year depending on service and country
- USPS investigates before paying — expect 30–60 days
- Claims are frequently denied for "insufficient packaging" or missing documentation
Verdict: Free $100 coverage is useful for low-value domestic shipments. For anything over $100 or any international shipment, USPS's coverage is limited and slow.
UPS
Included free: $100 declared value on all shipments (domestic and international)
Additional coverage: ~$0.85 per $100 of declared value above the first $100, up to $50,000. Above $50,000 requires special arrangements.
The fine print:
- UPS calls it "declared value," not insurance — it's a liability cap, not a true insurance product. That distinction affects how they process denials.
- Lost package claims require a 24-hour waiting period after expected delivery
- Domestic investigations take 8–10 business days; international takes longer
- UPS can deny claims if they determine your packaging didn't meet their standards
Verdict: More reliable than USPS for domestic claims. International claims are variable. The $0.85/100 rate is fair, but third-party options are cheaper.
FedEx
Included free: $100 declared value on all services
Additional coverage: ~$0.80 per $100 above the first $100, up to $50,000. Higher limits through FedEx Custom Critical.
The fine print:
- Also "declared value," not insurance
- Prohibited items list is extensive: artwork, antiques, jewelry, certain electronics, and others — claims for these are denied regardless of how the damage happened
- Simple claims resolve in 5–7 business days; disputed or high-value claims take longer
- Must retain all original packaging until the claim is resolved
Verdict: FedEx resolves claims the fastest of the three major carriers. But check their prohibited items list before shipping anything unusual — it will save you the paperwork.
DHL
Included free: Limited liability (varies by service and origin/destination)
Additional coverage: Available through DHL Shipment Value Protection at approximately 1.5% of declared value.
International coverage: DHL is the strongest of the four carriers for international claims. Their global network and documentation processes are more consistent than USPS international.
What Carriers Typically Exclude
Across all carriers, standard coverage won't pay for:
- Improper packaging (their definition of "proper" is deliberately vague and often used to deny legitimate claims)
- Cash, gift cards, or negotiable instruments
- Perishables
- Fragile items without adequate cushioning
- Services that don't include coverage by default
- Items damaged by the recipient after delivery
Carrier Insurance vs. Third-Party Insurance
| Carrier | Third-Party (Shipsurance, etc.) | |
|---|---|---|
| Cost per $100 | $0.80–$2.50 | ~$0.55 |
| Claim speed | 30–90 days | 5–15 days |
| Payout reliability | Moderate | Higher |
| Max coverage | Up to $50,000 | Up to $10,000+ |
| International | Limited | Strong |
For most shippers, third-party insurance is cheaper and pays out faster. The only reason to use carrier insurance is convenience — you add it at label creation without needing a separate account. If you ship regularly and want real coverage, Shipsurance is worth setting up.
Bottom Line
Every carrier gives you $100 free. For anything more valuable than that — especially international shipments — you either add declared value coverage through the carrier or buy a separate policy. Third-party wins on both price and claims experience.
Coverage amounts and claim procedures are subject to change. Verify current terms with each carrier before shipping.