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Thu Jan 11 2018 08:44:01

Seller Warns of the Limits of Third Party Shipping Insurance

By: Reader

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Dear Ina, 
Sellers need true protection when they insure items, but there is a pitfall with insuring using a third party insurance company that many sellers may not know about. In October, 2017, I insured a very expensive item using Shipsurance via Seller Sourcebook. The item shipped USPS Priority, requiring a signed delivery confirmation. Weeks later the delivery confirmation showed that it had not been delivered or signed for. 

I first contacted the buyer, who was not responsive. I then contacted USPS, and opened an investigation. A few weeks later USPS online showed "case resolved". When I contacted USPS, they stated that the case was resolved simply because they could not find the package, and they were closing the case. I had a non-responsive buyer and a missing package valued at hundreds of dollars.

In December I filed a claim with Shipsurance as I felt pretty strongly that I was going to have to refund the buyer. Weeks later, not having heard back from Shipsurance, I followed up with the claim number by calling. Shipsurance had responded, but that email had gone to my junk folder. Shipsurance was requiring additional information, which included a signed affidavit from the buyer stating that he had not received the item. Since I had a non-responsive buyer, this claim was not going to be paid. Vanessa at Shipsurance confirmed this, stating that this is written in their policy. Thus the "gotcha" in the policy. 

Sellers should not assume that just because they insure an item that their claim will be paid. Vanessa stated that I had only until February 8th to obtain the affidavit from the buyer. After the 8th, the time for filing would end.

Thankfully this story has a happy ending. I got eBay involved, and I got PayPal involved, to get in front of a potentially fraudulent transaction. eBay contacted the buyer and gave me the buyer's telephone number. This action resulted in the buyer responding that he had indeed received the item (via eBay messaging). USPS clearly dropped the ball on scanning this into their system upon delivery.

In hindsight, I should have gotten both eBay and PayPal involved BEFORE I contacted Shipsurance, but what I learned is that no signed affidavit from the buyer, and no insurance protection from the third party insurance company. It is clear to me that I will not be insured in cases of a buyer not cooperating with an insurance claim.

If any of your readers know if this is the case with all third party insurers or USPS insurance, I would ask them to weigh in. I need true protection, even in the event that I am defrauded. Thankfully in this case I was not, and I learned to do as much as I can on the front end, before I contact the insurer.
Stephen




Comments (30) | Permalink

Readers Comments

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: TrickyMick This user has validated their user name.

Thu Jan 11 10:13:13 2018

Thanks Stephen , that's nice to know/add to ebay fraud fighting arsenal.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: RL15 This user has validated their user name.

Thu Jan 11 11:54:19 2018

All that could have been avoided if you did not baby sit the tracking.

Your buyer would have let you know if the package was not received.

You are very lucky that the buyer admitted they got the package. There are a lot of buyers that see no tracking and file INR. They get their money back and keep the item.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: exdwh This user has validated their user name.

Thu Jan 11 12:12:47 2018

3rd-party insurance also has more item exceptions than USPS insurance. For example, 'computer chips' (i.e. any electronic part not soldered to a finished assembly) are not covered even if the package completely disappears.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: toolguy

Thu Jan 11 12:19:08 2018

I NEVER use 3rd party insurance

USPS insurance only!

If the package goes missing I'm sure USPS will pay the claim.

But luckily I've never had to make a claim for a lost or damaged package. . .

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: aim04744 This user has validated their user name.

Thu Jan 11 13:15:51 2018

I am confused as to why the claim was filed in the first place? Buyer never complained about INR, seller took it upon himself to investigate and cause himself a lot of problems for no reason.

This is a good lesson in stepping away from the computer and not helicoptering the process.  

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: cardfinds This user has validated their user name.

Thu Jan 11 14:08:24 2018

Just so everyone knows, when you ship through Fedex Smartpost, your item is not insured at all. I learned the hard way when an item I shipped arrived damaged and I was out the entire amount!!!

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: eXtinctBay

Thu Jan 11 14:11:28 2018

If you mailed something that required a signature upon delivery, and the USPS carrier dropped off the package without it being signed for, they are at fault.

But, unfortunately, the Postal Service will not pay a claim for their failure to ensure the guaranteed delivery of the item. They will just refund you the $2.35 (or whatever cost you paid for the Signature Confirmation service).

Of course, you can also report the carrier who did not do their job, and he or she will be reprimanded.

When I mail a package which needs to be signed for, I highlight the ''USPS Signature Tracking'' stated on the label. And, sometimes, I also write ''Signature Required For Delivery'' on the box.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

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

Thu Jan 11 14:12:29 2018

Shipsurance is a fraud.  I used to insure through them years ago.  After denying a claim repeatedly, they ended up blocking me from using their service!  They changed their TOS and would not honor the original TOS that were in place when I purchased the insurance.  They flat-out denied that the policies I claimed were in their TOS actually were.  As you might imagine, they were not too thrilled when I supplied screen captures of their older TOS.  They paid out the claim and then blocked my account with them.  Since then, I've been insuring with USPS, which is not all that much better.  I have had luck appealing claims with my congressional representative, but it's a shame that his office needs to get involved more often than not when USPS loses an insured package.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: iheartjacksparrow

Thu Jan 11 15:05:16 2018

I print mailing labels through Endicia. Whenever I need to insure a package, I always choose the USPS insurance option. It may cost more, but I figure there would be less hassles going through them (and I know the postmaster of my branch so I assume he would make sure a claim would be paid out).

@eXtinctBay - That's a great idea about highlighting the "signature tracking" on the label. So far I haven't had any problem with people signing for their items.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: eXtinctBay

Thu Jan 11 15:45:18 2018

@sparrow

I haven't had any problems with the USPS signature service as well.

Saw this on a blog a couple of years ago where a seller was out a ton of money merely because a carrier delivered a package without it having been signed for.

Then, of course, he or she had to issue a refund for ''non-delivery''. I still buy insurance from a third party (not Shipsurance) occasionally even when a package is sent with USPS Signature Confirmation.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: eXtinctBay

Thu Jan 11 15:50:36 2018

@cardfinds

I send packages via FedEx SmartPost, then also insure them through my third party insurer.

Both are at a huge savings over the USPS.

Also, the SmartPost product FedEx uses is USPS Parcel Select, so the package is actually delivered by the Postal Service.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: RKTOYS

Thu Jan 11 16:13:25 2018

Everybody saying the seller should've waited for the buyer to say something apparently haven't considered that buyer waiting 5 months and 29 days to go "uh oh Spaghetti-O!" to eBay/Paypal for a refund and how that would be well outside of the seller's insurance window.  Although I agree that OP was _very_ lucky and Shipsurance definitely sounds like a fraud.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: BuildingMyOwnSite

Thu Jan 11 16:15:45 2018

@Steven: ▲ What Jack Said ▲

I use USPS for shipping 99% of the time.  But I NEVER pay for “un-included” insurance, until the item value is up to 200.00.  So I am self-insuring a lot of my sales, up to 200.00.  At 200.00 I purchase USPS insurance on breakables.  I've been self-insured below 200.00 for at least 15 years now.

I have had only 2 claims in 19 years.  (200.00 & 500.00)  Those two WERE insured with USPS.  But the real point, is that I've shipped thousands of packages, and USPS has never broken ANYTHING AT ALL.  The two above claims were FAKE, and used to get parts needed, or replace an item already broken.

SO: Do a quick spreadsheet.  Factor in your average selling prices, and how much the insurance costs.  In my case, I do not insure breakables under 200.00.  And unless your experience is much different with USPS, you will quickly see how far ahead you are by self insuring.   I was shocked when I finally did the math, and am so far ahead, I'm still astonished.

I've heard your story before, and you can also have problems with USPS.  If you have a ticked off buyer, who doesn't want to cooperate by saving packaging etc, you'll have problems collecting from USPS also.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: bitbybit

Thu Jan 11 22:27:52 2018

First want to say I haven't had a claim in years. The very few claims I have had with Shipsurance were always refunded and handled professionally. From what I remember, since this was several years back, an overseas buyer had to verify the claim with Shipsurance. It did help that the buyer was cooperative and the claim process went smoothly. I can understand Shipsurance's view on having a tighter claims process. I am sure in the beginning when they were first trying to become established they paid out claims too quickly and later found certain claims to be fraudulent. We all know companies that make policy changes when a few bad apples spoil the bunch.

Most of my items are sent USPS Priority with the included insurance but still use Shipsurance when needed for added protection on certain items. And no I am not affiliated with Shipsurance in any way and would still recommend them.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

This user has validated their user name. by: LasVagueness

Fri Jan 12 00:32:10 2018

Shipsurance: I once had a $1,000 claim reimbursed by Shipsurance. I later learned that the parcel had in fact been delivered. I sent the money back to Shipsurance (the tracking number never did show delivery). After using the service for a year I decided it was too expensive.

USPS: Protracted and nightmarish claims that are still seared in my memory. A level of inefficiency like I've never seen.

ShipSaver: This is the service I use today based on superior customer support and one claim that was processed to my satisfaction. The cost is very economical. Plus, ShipSaver is more elastic on limits. For instance, you can insure up to $2,500 using SmartPost and $1,000 if shipping via first class mail international (USPS limit is $400). So there are some advantages to using ShipSaver (although they have launched a new site which I find to be too busy and cluttered...much like SellerHub).  

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: frustrated This user has validated their user name.

Fri Jan 12 06:55:02 2018

Just attempted to get refund for lost mail yesterday through the dreaded ShipSurance

DON'T WASTE YOUR MONEY.

1: The buyer has to fill out the affidavit or they don't pay.

2: they are NOW asking for photos of the item, and packaging prior to shipment.

So unless you wanna take thousands and thousands of photos and store them all somewhere marked as to what you shipped and when, forget it.

I got seriously lucky and the PO in Luxembourg located the item. Thank Goodness.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: unknown This user has validated their user name.

Fri Jan 12 08:28:01 2018

I'm surprised that you're surprised they want a statement from the buyer. Kinda like expecting a life insurance company to payout based on you telling them your mother died vs them requiring a death certificate.

This was no hidden gotcha. It's in the TOS along with the items they do not cover and countries they do not insure to.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: spooky This user has validated their user name.

Fri Jan 12 11:05:27 2018

why would you possibly go looking for trouble when it was not there??? any seller who checks tracking updates on all their packages should find another hobby.

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: a_c_green This user has validated their user name.

Fri Jan 12 11:11:48 2018

> This action resulted in the buyer responding that he had
> indeed received the item (via eBay messaging).

Meaning that he never contacted you (or even checked his email, apparently) because there was no problem to begin with.

Don't get me wrong: I monitor my shipments, too, but there's nothing to be gained by freaking out and filing a claim when no one but you is seeing anything unusual.

I may occasionally see a shipment of mine that seems to be going off in a strange direction, or disappearing off the radar for longer than expected, but it's only if the buyer contacts me that I will say something about it (and it's generally just to let them know that I'm watching the situation, and I'll ask them to wait another week as I expect it to arrive any day now, which it invariably does).

Seller Warns of the Limits of Third Party Shipping   Seller Warns of the Limits of Third Party Shipping

by: JWsax This user has validated their user name.

Fri Jan 12 12:37:01 2018

I've only filed one USPS claim. It was for a $400+ money order sent to a legitimate guy in Trinidad but stolen and cashed otherwise. USPS took care of it exactly as they said they would.

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