A lost package, damaged goods in a package, a stolen package = An unhappy customer & a lot of money lost for the sender. This is the nightmare of every professional who ships goods, whether they are an e-merchant, a business, or an individual. At the heart of this anxiety lies a crucial question: was your shipment insured? Really insured?
Forget everything you thought you knew. Many shippers navigate blindly, relying on basic guarantees that are financial traps. This guide isn't just an article about insured packages or a hidden sale: it's your shield. It's the most comprehensive resource you'll find for understanding, choosing, and using package shipping insurance. By the end of this read, you'll never again experience the stress of shipping valuable items. You'll be in control.
What exactly is parcel insurance?
Parcel insurance is your peace of mind contract. It is financial protection that covers you against the three scourges of transport: loss, theft, and breakage.
Its sole purpose is to ensure that you are compensated for the actual declared value of your property. This is not an option for valuable items; it is the foundation of professional and secure shipping.
Different Types of Parcel Insurance: Understanding Your Options
Not all parcel insurance policies are the same. Understanding the differences between each type allows you to make the right choice for your needs.
Flat-Rate Insurance (or Weight-Based Insurance)
This is the basic insurance automatically included by most carriers. It works simply but is limited: you are compensated based on the weight of your package, generally around $25 per kilogram.
Concrete example: you ship an iPhone 14 Pro (value €1,200, weight 206 grams). In the event of loss with flat-rate insurance, you will receive approximately €4.74 in compensation. The rest of the loss is your responsibility.
This option is only suitable for low-value goods with a very low value-to-weight ratio (basic clothing, used books, etc.).
Ad Valorem Insurance (Based on Value)
This is true professional protection. The term "ad valorem" literally means "according to value" in Latin. With this insurance, you declare the actual value of your property and are compensated on that basis in the event of damage during delivery.
The cost of this insurance is proportional to the declared value, generally between 0.5% and 1.5% depending on the Carrier insurer chosen. For our iPhone costing €1,200, the insurance would cost between €6 and €18, but would fully protect the entire €1,200.
This option is required whenever you ship goods whose value significantly exceeds their weight (electronics, jewelry, watches, leather goods, art, etc.). Insured parcel shipments are necessary.
Comprehensive Insurance
A premium version of ad valorem insurance, it offers extended coverage that includes not only loss, theft, and breakage, but also additional risks such as damage related to extreme weather conditions, strikes, and certain cases of force majeure.
This option is particularly recommended for international shipments to high-risk areas, or for exceptional goods whose loss would be irreparable (unique prototypes, original works of art, historical documents).
It generally costs 50% to 100% more than standard ad valorem insurance, but the peace of mind it provides justifies the investment for critical shipments.
Armored Transport Insurance
For very high-value goods (worth more than €100,000), traditional insurance is no longer sufficient. Armored transport services such as those offered by Malca-Amit or Ferrari Group combine secure transport (armored vehicles, armed agents, escorts) with comprehensive insurance.
This solution is reserved for the extreme luxury sector, high-end jewelry, major works of art, and precious metals. The cost is high (several hundred euros minimum per shipment) but remains the only viable option for these stratospheric values.
Why Ignoring Parcel Transport Insurance Is a Fatal Strategic Mistake
Taking out insurance is not an expense, it is a strategic investment in the sustainability of your business. Here's why.
To Protect Your Cash Flow
In the event of a claim, you don't just lose the value of the product. You lose the order, the shipping costs, and you often have to send a second product at your own expense. Insurance breaks this vicious cycle and protects your margin.
To Save Your Reputation
A customer whose package is lost or damaged does not blame the Carrier. They blame you. Quick crisis management, thanks to insurance that allows you to reship or refund without delay, turns an angry customer into a loyal ambassador.
To Limit the Impact
Do you ship internationally? Do you send fragile items? Are you facing peak season (Black Friday, Christmas)? Insurance is your only guarantee to get through these turbulent times without losing out.
The Deadly Trap of "Included" Insurance vs. Real Protection
This is where 90% of shippers go wrong. There are two worlds.
- Basic Compensation (Included): Offered by default by carriers, it is almost always based on weight (e.g., $23/kg). This is an illusion of security. Your $1,200 smartphone (200g)? You will be compensated less than €5. Your €800 piece of jewelry (50g)? Barely more than €1. This is useless protection for any valuable item.
- Supplementary Insurance (Ad Valorem): This is the ONLY one that matters. "Ad Valorem" means "according to value." It is an option that you purchase to declare the actual value of your property and be compensated on that basis. Whether through the Carrier , better yet, a specialized insurer, this is the only real protection.
How to Use Parcel Insurance: The Process in 3 Key Steps
Subscribe at the Right Time
Insurance must be taken out when you create your shipment, never after. You can do this directly with the Carrier see our articles on La Poste insurance, Chronopost) or, for greater coverage and flexibility, with a specialized third-party insurer.
Report Fair Value
Declare the exact value of your item, providing supporting evidence (invoice, appraisal). Do not underestimate the value to save a few cents, as you will be underinsured. Do not overestimate the value, as the insurer will check it: this is the principle of declared value for insured parcels.
Mastering Complaints
In the event of a claim, speed is key. Contact the insurer immediately, provide the requested evidence (proof of value, photos of the damage, packaging compliance) and comply with the terms of the contract.
In which cases are insured parcel shipments NON-NEGOTIABLE?
If you recognize yourself in any of these profiles, never send a package without proper Ad Valorem insurance.
Shipments during Peak Season
The Black Friday, Cyber Monday, and holiday seasons see parcel volumes skyrocket. Direct consequences:
- Saturation of sorting centers: Faster handling = more errors and damaged packages
- Seasonal recruitment: Less experienced staff
- Longer delivery times: More time in transit = greater exposure to risk (lost or damaged packages, etc.)
Recommendation: If you usually only insure packages worth more than €200, lower this threshold to €100 during the peak season. Consult our Peak Season Guide for optimal preparation.
Universal criterion: Value > 10x the Insurance Cost
The golden rule of risk management: If the value of the asset exceeds 10 times the cost of insurance, insurance is always mathematically profitable, even with a very low loss ratio.
Simple calculation:
- Insurance at €15 → Break-even point: €150
- Insurance at €50 → Break-even point: €500
- Insurance at €100 → Break-even point: €1,000
Logic: Even if you only have one claim for every 50 shipments (a 2% claim rate, which is high), the cost of parcel insurance is still significantly lower than the cost of a single uninsured claim. And even if you have one transport dispute for every 200 shipments (0.5% claim rate, which is low), parcel delivery insurance will reimburse you for your purchase price + your cost price + your margin and allow you to send a new item, thereby doubling your margin on the same sale!
Practical example: You ship 100 packages worth €300 each with insurance at €2.25 per package (0.75% of the value). Total insurance cost: €225. If you suffer a single loss on these 100 packages, you would lose €300 without insurance. With insurance, you are protected and the cost remains under control, you are compensated up to €300, and you can reship a new item worth €300.
Limitations and Exclusions You Absolutely Need to Know
Not all insured parcel shipments are the same. Always check:
- Limits : From a few hundred euros for carriers to over €100,000 for specialists.
- The List of Excluded Items: Many basic contracts exclude jewelry, art, high-tech items, etc. Read the fine print! That's often where unpleasant surprises lurk.
Comparison: How to get the best of both worlds
Conclusion on Ad Valorem Insurance
In conclusion, parcel insurance is not a gimmick, it is a fundamental strategic tool. It protects your money, your reputation, and your peace of mind. By understanding the crucial difference between false guarantees and genuine Ad Valorem insurance (see our encyclopedia on all parcel insurance offers), you can transform each shipment from a risky gamble into a professional operation that is controlled from start to finish.
Appendices
Sector-Specific Use Cases: What Insurance Do You Need for Your Business?
Each industry has specific needs when it comes to parcel shipping insurance. Here is a practical guide by business type.
E-commerce Fashion and Accessories
Typical profile: online store selling clothing, shoes, and leather goods for the general public. Average value per package: €80–300.
Main risks: damage due to weather conditions (humidity, heat), routing errors, theft at sorting centers for premium brands.
Recommended solution: ad valorem insurance with automatic coverage starting at €100 in value. Choose a solution that is integrated with your CMS to avoid forgetting to cover large orders. Check that branded leather goods (even entry-level items) are not excluded.
Specific tip: for customer returns, also insure the return shipment, especially if you offer free returns on valuable items.
Jewelry and Watchmaking
Typical profile: jeweler, watchmaker, luxury watch retailer. Average value per package: €2,000–50,000.
Main risks: targeted theft (jewelry packages are identifiable by their low weight and small size), catastrophic total loss for cash flow.
Recommended solution: specialized insurance with Limit of €100,000. Traditional carrier insurance policies systematically exclude this sector. Consult our specific guide to watch and luxury insurance for optimal protection.
Specific tip: use completely anonymous packaging (no mention of jewelry or watches) and use neutral descriptions on shipping labels such as "fashion accessory" or "measuring instrument."
Electronics and High-Tech
Typical profile: reseller of smartphones, computers, computer components, audio/video equipment. Average value per package: €300–€2,000.
Main risks: breakage during transport (screens, fragile components), rapid obsolescence, which complicates the assessment of value in the event of a claim, theft targeting premium brands (Apple, Samsung, etc.).
Recommended solution: ad valorem insurance with no exclusions on refurbished electronics (some insurers refuse to cover this). Check that prototypes and products in the testing phase are also covered if you are in the B2B tech sector.
Specific tip: for refurbished equipment, always keep a record of your purchase price and margin to prove the actual value in the event of a dispute with the insurer.
Craftsmanship and Unique Creations
Typical profile: artisan creator (ceramics, glassware, sculptures, textile creations, etc.). Average value per package: €50-500, with unique, irreplaceable items.
Main risks: total loss of unique items for which the "replacement value" is meaningless (it is impossible to reproduce the exact same item), difficulty in justifying the value of a unique creation.
Recommended solution: comprehensive insurance that accepts "declared value" assessments without requiring a purchase invoice (since you are the creator). Document your creations with professional photos and keep a record of your usual selling prices to justify your declarations.
Specific tip: for particularly fragile items, invest in professional, custom-made packaging and keep photos of the item "before packaging" to prove its initial condition in the event of a dispute upon delivery.
Marketplace and Secondhand Sales (Vinted, Leboncoin, Vestiaire Collective)
Typical profile: private individual or semi-professional who regularly sells on second-hand platforms. Average value per package: €30–800.
Main risks: legal liability until receipt by the buyer, frequent disputes over the actual condition of the goods, difficulties in proving the value of a used item.
Recommended solution: for items worth more than €200, always take out additional insurance (the basic coverage provided by platforms often stops at this amount). Choose insurers that accept transaction screenshots as proof of value.
Specific tip: on Vinted, buyer protection includes up to €200 in insurance, but please note that there is no longer any seller protection. Beyond that, it's up to you to cover yourself. See our comprehensive guide to Vinted security.
Import-Export and International Trade
Typical profile: large company or goods exporter, freight forwarder. Average value per package: highly variable, ranging from €500 to €100,000.
Main risks: complex customs regulations, geopolitical risks in certain areas, multiple intermediaries (each handling = a risk), extended lead times increasing exposure to risk.
Recommended solution: comprehensive insurance with explicit coverage for customs risks (destruction or seizure by authorities), port strikes, and exceptional delays. Check the list of countries covered (some areas are systematically excluded).
Specific tip: for shipments outside the EU, make sure your policy also covers customs clearance and return costs in case of refusal at the border.
Parcel Insurance Glossary: Terms You Should Know
Mastering parcel insurance vocabulary helps you avoid misunderstandings and understand contracts.
Ad Valorem
Latin expression meaning "according to value." Refers to insurance where compensation is calculated based on the actual declared value of the item, rather than its weight or a flat rate. This is the type of parcel insurance that should be chosen for all valuable items.
Addendum
A contractual amendment added to an initial insurance contract. For example, if you wish to temporarily increase your Limit for an exceptional shipment, the insurer will have you sign an endorsement.
Declaration of Value / Declared Value
The amount you officially declare when taking out the insurance. This value must be justified by an invoice, a certificate of authenticity, or an appraisal. In the event of under-declaration, compensation will be reduced proportionally.
Exclusion
Situation, event, or type of property for which the insurance does not apply. Common examples include perishable goods, live animals, currency, and official documents. Always read the list of exclusions carefully before taking out a policy.
Franchise
The amount you are responsible for paying in the event of a claim, even if it is covered. A deductible of €50 means that if your €300 package is lost, you will receive €250 in compensation. Choose insurance without a deductible for optimal protection.
Warranty Limit
Maximum amount of compensation that the insurer agrees to pay per claim. This Limit often the most restrictive criterion in traditional carrier insurance policies (maximum of $5,000 to $10,000). Specialized insurers offer Limits $100,000.
Insurance Premium
The cost you pay to benefit from coverage. In the case of ad valorem insurance, the premium is generally expressed as a percentage of the declared value (e.g., 0.75% Excluding VAT the value).
Sinister
Event covered by insurance giving rise to compensation: loss, theft, damage. Claims relating to deliveries must be made within the contractual time limits (generally 48 hours for damage, a few days for loss, depending on the contract).
Subrogation
Legal mechanism whereby the insurer, after compensating you, takes your place in order to recover the sums from the Carrier . This saves you from having to take legal action against the Carrier yourself.
Replacement Value
Compensation calculated based on the replacement cost of the item with an equivalent new product, without applying depreciation. Particularly advantageous for professional equipment or electronics that depreciate quickly.
Market Value
Compensation calculated based on the current market value of the property at the time of the loss, taking into account its condition and age. This method is less advantageous than replacement value for used property.