UPS Insurance vs USPS: Which is Better?

Learn about the key differences with the built-in insurance coverage that both UPS and USPS provide
UPS insurance
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If you’ve ever shipped a package with either USPS or UPS, you’re likely aware that you’re covered with a certain amount of shipping insurance. Insurance from USPS and UPS allows you to file a claim in the event of a missing package, or a shipment that arrives damaged. However, while both USPS and UPS provide similar coverage in these situations, there are some key differences when it comes to the coverage itself that you receive from both carriers.

The Differences Between USPS and UPS Insurance

There are a few main differences between the kind of coverage you get from USPS and UPS. Here are the main points you should be aware of:

UPS Insurance is Technically “Carrier Liability”

The first difference between the two carriers’ insurance is the name. Believe it or not, UPS doesn’t consider their insurance, well…insurance. Instead, they call it “carrier liability,” which you’ll see written out when you buy discounted postage through the UPS Digital Access Program (or DAP, for short). If you walk into your local UPS Store to purchase a label, they’ll still probably throw the term “insurance” around, though—and in this case, it refers to the exact same thing. At the end of the day, it’s still referring to the coverage they provide for missing or damaged shipments.

Pro Tip: Discounts from the UPS Digital Access Program are only available when you use shipping software to buy labels online. Learn more about choosing the best shipping software for your small business.

UPS Provides Up to $100 in Carrier Liability for All Shipments, Not Just Some

This is the biggest difference between the two carriers’ policies: all UPS services include up to $100 of carrier liability, while the only services that USPS insures are Priority Mail and Priority Mail Express (both domestic and international). That means that other popular USPS services such as First Class Package, Media Mail, and Parcel Select/Retail Ground come with zero built-in insurance. If you want to insure a package that you use with any of those three services, you need to shell out some extra cash for protection.

UPS, on the flip side, covers you no matter which of their services you ship with. You’re covered for up to $100 when you ship with UPS Ground, 3 Day Select, 2nd Day Air, Next Day Air, Standard, Worldwide Express…you name it.

USPS May Not Cover the Shipping Cost, While UPS Insurance Does

Here’s something to be aware of in the fine print when you ship with USPS: the Postal Service won’t cover the cost of shipping if the package’s value already reaches $100.

Here’s an example to show you what we mean: if your items in a missing Priority Mail package are worth a total of $100 and it costed you $10 to send the package, USPS will only pay out $100; you won’t be seeing the $10 shipping cost back as a part of their Priority Mail coverage.

On the other hand, UPS carrier liability pays out up to $100 of the cost of the replacement item, as well as the total cost of shipping. That means that if you file claim for $100 worth of goods that cost you $12 to ship, UPS will pay out $112 total—the cost of the items, and the cost of shipping. In our experience, getting those extra few dollars back goes a long way whenever you need to file a claim!

UPS Carrier Liability Covers Certain Things that USPS Doesn’t (and Vice Versa)

Lastly, the types of items that USPS and UPS cover (or won’t cover) vary. Certain items are excluded from coverage for both carriers, while other items are only excluded by one or the other.

For instance, while both USPS and UPS insurance doesn’t cover perishable items, UPS specifically excludes coverage from packages containing insects, moths, or vermin. USPS, on the other hand, doesn’t mention anything about excluding coverage from those kinds of shipments. USPS insurance doesn’t apply to items that the Postal Service prohibits, of course…but neither insects, moths, nor vermin fall into the category of items that USPS prohibits.

Here are a couple of resources where you can read more about what both carriers exclude from coverage:

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  1. Jon

    I’m sending a clock out for repair and I’m going to buy extra insurance for $2,000. I heard that it’s impossible to collect an insurance claim from USPS and I should consider UPS. Is this true or just hearsay?

    • BG

      I tried to claim insurance from USPS and it was impossible

  2. Dawn

    I am trying to sell a lot of high end shoes, boots, pillows, clothing on Poshmark or Ebay. I have had horrible experiences sending through USPS so UPS will be my shipping choice. Do I get labels to fill out by hand from UPS store or? My printer is basic and for paper, not stickers. Do they charge by weight and size of each item and can I get a rough estimate of cost at home and if so, can someone walk me through that process? I have to post shipping costs when I post items for sale (US only). I’m only finding vague or info. pertaining to businesses sending massive shipments. Thank you!

    • Liz

      I occasionally sell on eBay and they go by weight, measurements, and zip code. When making the listing, I usually put a zip code across the country, and weigh and measure the package. Usually it’s pretty accurate, and costs me less of sending closer. Cost really does depend on the zip code. Someone recently asked for reduced shipping so I boxed the item and took it to UPS to get an estimate, which was half of my estimate because their zip code wasn’t too far away. I only print mailing labels on plain paper and cover with clear packing tape. No need to have self stick labels. When listing an item on EBay, pick UPS for shipping. It will ask for weight and dimensions, and shipping cost. That will appear in your listing. And as I said, I estimate shipping assuming the buyer is far away. I’ve only sold on EBay so don’t know how the others work. Good luck!


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