Ina Steiner EcommerceBytes Blog
News and insight focusing on ecommerce.
by Ina Steiner, Editor of EcommerceBytes.com
Sun Feb 23 2014 22:21:07

Does the USPS Deliver When It Comes to Insurance Claims?

By: Ina Steiner

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Online sellers have long debated the value of paying for insurance, no matter which shipping carrier they use, and a new lawsuit brings the issue to merchants' attention yet again.

An Idaho man has sued the USPS for denying his insurance claim despite the fact the agency acknowledged it was unable to find the items that had been inside his package. In this particular case, it's actually the buyer who filed the lawsuit after he purchased tractor parts from an online site a year ago.

The reason for the denial was that the buyer had waited too long to file the claim, but the plaintiff said he filed the claim upon receiving official notice from the USPS that it couldn't find his item.

A typical complaint from sellers is when they discover that the items they insure are simply not covered - often after having paid insurance for many such items over long periods of time. One eBay seller decided to fight eBay in court over its ShipCover insurance, but that case has not fared well for the plaintiff.

Another complaint - often sellers say buyers don't cooperate with them in cases where items are damaged in shipment and they try to file a claim with the insurance company. Here's an example that shows how costly that can be.

But in this most recent lawsuit filed this month, the buyer said he was unable to get the seller to cooperate - and in fact, the seller's website is currently not loading.

Some sellers forgo purchasing insurance and instead, they "self insure."

The full story about this new lawsuit against the USPS is available in Monday's EcommerceBytes email newsletter. If you have experience purchasing insurance for packages you send, let us know if you've had any good or bad experiences. Read the story and weigh in with your thoughts and opinion.




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Readers Comments

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This user has validated their user name. by: iheartjacksparrow

Sun Feb 23 22:45:00 2014

I ship everything by USPS. I require that anyone whose purchase(s) total $40 or more pay for insurance. I've only had to make two claims: The first was to a buyer in Pasadena, California (about a 30-minute freeway drive from me) whose package just disappeared off the earth. I had no problem getting the insurance claim paid. The second was a buyer in Texas who was nuts. She left me negative feedback stating I stole her money, and then she writes me asking for a refund. I told her to forget it, she already stated I was a thief so I wasn't filing an insurance claim for her. She finally agreed to have the feedback removed, I filed the claim and she was paid.  

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by: BigMama This user has validated their user name.
Web Site

Sun Feb 23 23:40:21 2014

I have never been able to collect on a USPS claim.  There was always some type of excuse or flat out denial.  For the last 5+ years I have used 3rd party insurance in conjunction with stamps.com.  

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by: PowerSeller2007 This user has validated their user name.

Sun Feb 23 23:58:21 2014

USPS once lost my EMS parcel to Australia.  It not only refused to refund my postage.  It also refused to pay for the $100 guaranteed insurance.  

What is the EXCUSE?!!!!!
It said the tracking said it is at the US Customs so it is NEVER considered lost.  EMS is  for few days to Australia.  The parcel was lost its tracking over 1 month and USPS still claim IT WAS NEVER LOST!

USPS.. BROKEN!
GUARANTEED REFUND?  FALSE.
CHEATER?  ABSOLUTELY!


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This user has validated their user name. by: Ric

Sun Feb 23 23:58:43 2014

We ship 99% of orders with USPS.

Before USPS included insurance with Priority Mail postage, we did have 2 cases where we purchased insurance and needed to file a claim.

In both cases claims were filed online and we provided documentation of prices paid as well as copies of the buyers complaints. Both of those claims were paid no questions asked within 14 days of filing.

Just last week, we had another buyer contact us regarding a damaged item received. ( $100.00 insurance was included in the purchase of Priority Postage.) We refunded the buyer immediately and filed a claim with a copy of the refund and the emails from the buyer.  We received a check to settle that claim 7 business days after filing the claim.

I believe the more documentation you provide when the claim is filed, the faster the claim is processed and paid.

No complaints from us as far as USPS insurance is concerned.

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by: Truk This user has validated their user name.

Mon Feb 24 00:12:21 2014

USPS has never paid a claim or followed up on a claim

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This user has validated their user name. by: thehosst

Mon Feb 24 00:30:07 2014

They don't deliver on insurance claims and they especially don't deliver on time anymore. The First class mail is now pony express mail, terrible service in all aspects. If you ever try to collect on a package lost, good luck, same with money order, Never buy money orders from the USPS, it will save you a lot of trouble.  

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by: digger This user has validated their user name.
Web Site

Mon Feb 24 04:43:11 2014

I sell books and use the USPS. I did have to file a USPS insurance claim on a $100 book that went missing and they paid me very promptly.  However, some weeks later, the buyer did receive the book. In over 30 years of shipping with USPS, only 1 package has disappeared and never re-appeared.

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by: FeelingFroggy This user has validated their user name.

Mon Feb 24 07:36:27 2014

Does the Post Office deliver when it comes to Insurance claims...

Heck we can't even get them to scan tracking when a package is delivered.

Post Office is becoming one of those companies who over promise and under deliver.

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by: felyne This user has validated their user name.

Mon Feb 24 07:46:49 2014

I thought a package was missing and started the process, it was difficult for me to find how to go about filing. They sent me in circles. I now insure with a third party so I  never have to go through that 'loop' again.

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by: trader_chris This user has validated their user name.

Mon Feb 24 07:56:00 2014

I ship probably 1000+ packages per year with USPS and have overall been very pleased with service, even to international destinations. I would say that I maybe average 1 problem every 1-2 months (something may be damaged, delayed, or lost), but that's simply part of e-commerce. Most of the items that I send are insured through Shipsurance, a 3rd party insurance provider (I spend over $3000 with them last year...), which typically resolves claims quickly and efficiently, providing I have my paperwork in order. I had one USPS Priority Mail package disappear, then somehow get returned to me last year, and my local USPS customer service rep told me to re-send it express mail, then reimbursed me for the postage (eventually...) It's not perfect, but I have found dealing with the USPS claims to be a much better experience than UPS or FEDEX, who have repeatedly been very difficult to work with getting claims fulfilled.

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This user has validated their user name. by: Rexford

Mon Feb 24 07:59:40 2014

We've always used third party insurance companies for coverage. Dealing with USPS clerks and USPS employees in general makes my head spin because if you ask three clerks you might get three different answers.  I don't step foot into a post office unless I have to.  I do use them online and I've been pleased with that service, but I don't think that I want them insuring my packages.

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This user has validated their user name. by: Basset

Mon Feb 24 08:42:26 2014

Although I have not had any claims for a while, in the past I’ve filed a claim with USPS online. I had the supporting documentation for the claim and it was pretty painless and relatively quick.

If I remember correctly, if you go to the USPS counter, they steer you to the website. At least my USPS outlet did at the time.

With more packages being automatically insured now, I’ve wondered if it would be problematic. I’m glad Ric has had a good experience with the new Priority automatic insurance.

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by: KathleenJohnson This user has validated their user name.
Web Site

Mon Feb 24 09:00:19 2014

I feel that man's pain.
When the Post Office is good, it is very very good. But, when it is bad, it is horrid.

And your dealing with personalities more than "rules".

And, when one of my packages was delivered to the wrong house, on the wrong side of town - the less than helpful person at the local post office, in the delivery town, suggested that it was not their responsibility to go get the package. And, he says "They dont have to give it back to us either". Really? Not addressed to the residents at that home and they are not accountable? The Post Office not accountable?

So, I wrote to the Inspector General and they thought differently and the package was located at the "wrong" address and delivered to the correct address.

So much for tracking and insurance if you have to jump up and down to get wrongs righted. It should be seamless, but it is not......


..

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by: macsbaby This user has validated their user name.

Mon Feb 24 09:34:22 2014

I ended up shipping through USPS partly through FEDEX/UPS not paying claims. They take money and find a way not to pay practically every time. Now..maybe it was just me, but I dont think so. USPS at least paid most of the time, although at a snails pace. Try to get FedEx to pay on a broken glass vase! HAH! Disclaimers abound. I really use shipsurance now....I had very few claims...I think I have had 10 claims over 20 years, but I used to have employees when we shipped FedEx, UPS and USPS and USPS would win hands down....sad to say. Everyone seems to have a different experience, and I think a lot of it depends on how much you ship and how many packages break/disappear etc. A lot of ratios must get figured in. I had a few friends who swore by FedEx or UPS and it was because they did all their business through one or the other....shipping like merch, but they probably had fewer claims....so I think less grief when needing claims reimbursed.

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by: FREDDY This user has validated their user name.

Mon Feb 24 09:45:44 2014

10 years and only two USPS claims. Both were paid promptly.

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by: Tornad0sRul This user has validated their user name.

Mon Feb 24 10:32:47 2014

I worked in Commercial Insurance underwriting for 8 years. If you are a seller who chronically files insurance claims, it gets harder and harder to collect on those claims, and rightly so. I have only had one claim in the past 3 years with the USPS and they didn't even question it. I got a check in the mail within two weeks. That's because I never file claims because I package my items with care. It's similar to your homeowners or car insurance claims. If you file too many insurance claims you become suspect and your rates go way up, or you may even get your insurance cancelled completely. Insurance fraud is a huge problem and a big cost to insurance companies. If a seller is notoriously packing items in a way in which they aren't properly protected, which is not the insurance company's fault, they will have more claims, and cost the insurance company more money. Simple logic. Often times insurance companies tie the hands of business owners. For example in Minnesota there were some idiot Somali's who refused to take off their floor length skirts while working at a factory. Twice a skirt was caught in a machine and someone got injured, which cost the insurance company a lot of money. The insurance company told the factory that no longer were they allowed to wear long skirts around large equipment. The factory had to comply with the insurance company's demands or lose their insurance. It is federal law that businesses must carry certain levels of insurance so the factory would have to shut down without insurance. Yet the Somali's walked off the job saying it was against their religion to show their ankles. The USPS must comply with their strict insurance company's rules and requirements or they would literally have to close their doors.

But in this case the seller should be permanently suspended from EBay. This seller sounds not only inept, but possibly corrupt. These are the sellers who need to be taken off Ebay. It is these sellers who give Ebay a bad name, and who make it difficult for the good sellers.

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by: Toledo Maude This user has validated their user name.

Mon Feb 24 11:03:17 2014

I ship mostly easily breakable items, but 30 years of packing experience has taught me to not spare on packing supplies.  I buy in bulk (not at the office supply store) where bubble and peanuts are affordable.  

In a good year (when eBay is not pooping on it’s sellers killing our business), I ship 7 to 8 hundred packages with no damaged or lost packages.  

Priority Mail has never let me down while parcel post has.  Now when I ship through the post office, tiny packages go First Class and large ones Priority Mail.   Packages over two pounds to the West Coast go FedEx.  No problems!

Since I noticed that a drop of rain smeared an ink jet printed delivery label one time, I always cover the shipping labels with clear packing tape preventing loss of the shipping label and smearing of the printing.  Standing in line at the post office and noticing how many eBayers ship packages with sloppily written labels and/or not covered with tape, I wonder if they are not asking for lost packages.  

Now if I could only get buyers to read my descriptions about size and condition of their purchases cutting down on returns, that would be heaven.  

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by: Tornad0sRul This user has validated their user name.

Mon Feb 24 11:32:43 2014

Also, "self-insuring" has very strict regulations, one being that the business/company must be liquid enough to be able to afford paying out a large claim. High liability comes with that choice. Most companies/businesses do not choose this "self-insuring" option because then there isn't a cap on the amount that a lawsuit can be. They could lose their entire business on one claim.

This type of insurance is very rarely allowed by government regulations or by insurance companies. I have worked on such policies where the company wanted to "self-insure" but they had to jump through hoops and ended up spending practically as much as they would have by simply paying for insurance.

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by: PowerSeller2007 This user has validated their user name.

Mon Feb 24 11:42:22 2014

@FeelingFroggy
 Correct!  I lost a Priority Box worth over $250.  It was addressed 10 mile from the post office that I dropped it off.  It was marked Received in tracking and nothing followed.  The buyer claimed INR. I never thought a whole box would dissapeared without a trace so I did not insured it.   I was not even refunded the postage by the USPS.

I called 1-800-ASK-USPS each time.  There was no direction where to file claim online.


 

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by: semper fi This user has validated their user name.

Mon Feb 24 12:09:55 2014

USPS has NEVER paid for any claim I have filed with them. They lie, delay, ignore and flat ass refuse to pay for their mistakes and incompetency. They are no better then their counterparts in Russia and Brazil, and we all know what that's like. Remember, you are NOT dealing with USPS employees, your are dealing with independent contractors. USE UPS FOR THE REAL DEAL!

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