FedEx Insurance Rates

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March 16, 2024

Federal Express (FedEx) moves over 19 million shipments every business day to more than 220 countries and territories worldwide, according to 2022 data.

With this volume, you can imagine the possibility that one or two items can get lost or damaged. If you’re the shipper and the item you send is valuable, losing or damaging, it is likely the last thing you want.

In such cases, having insurance can help protect your item. If you want to send your item via FedEx, how much does adding insurance cost?

In this article, you’ll learn about FedEx shipping insurance rates and the basics of this coverage. This article also discusses what FedEx insurance can cover and how it compares to other shipping companies’ insurance offers.

To learn more about FedEx’s services and other shipping-related information, check out FindPostOffice.org for more articles.

How Much Does Shipping Insurance Cost?

Shipping insurance covers packages you believe are susceptible to getting lost or damaged. Such a service can be helpful, especially if the item you want to ship is valuable. 

The following sections discuss how much it costs to add insurance to your shipment.

FedEx Insurance Costs

As of 2023, FedEx charges $3.90 for insurance coverage of shipments whose declared value is from $100.01 to $300. For every $100 above $300, FedEx charges an additional $1.30.

International FedEx Shipping Insurance Charges

Based on FedEx international shipping insurance rates as of 2023, the company charges $1.30 for every $100 over the first $100 of your package’s declared value or $9.07 per pound (lb), whichever is higher.

FedEx Shipping Insurance Basics

Before adding insurance to your FedEx package, you must learn a few basic but essential information about shipping insurance. 

The following sections discuss the FedEx insurance basics.

What Is Shipping Insurance?

Shipping insurance can help protect your parcel against loss, damage, or theft whenever you ship a package.

Suppose you have an insured package that does not reach its destination or gets damaged during delivery. Your insurance can help reimburse your item’s declared value in such cases.

How Does Shipping Insurance Work?

To get reimbursed after reporting a missing or damaged package, file an insurance claim with your insurer or carrier. You must submit sufficient documentation proving your item’s value if you’re the shipper.

What Is FedEx Shipping Insurance?

FedEx insurance is a service that helps you receive reimbursement equal to the exact value you declare for a lost or damaged FedEx shipment.

You cannot directly purchase an insurance policy from FedEx. Instead, you buy coverage through an insurance company or agent.

Once you file a claim and it gets approved, the broker pays for the reimbursement regardless of whether the damage or loss was due to FedEx’s negligence.

What Does the Insurance Cover?

While having shipping insurance can benefit you in various ways, it has limitations that can affect specific items. The following sections explain what insurance can cover for your shipment.

FedEx Insurance Coverage

FedEx insurance provides coverage for shipments in transit, from door to door, based on the value you declare during shipping.

FedEx Shipping Insurance Exclusions

You will not get reimbursed if you declare a value for prohibited items and they get damaged or lost.

Based on the 2023 FedEx service guide, these prohibited items include the following:

  • Cash or currency
  • Live animals or animal carcasses
  • Items resembling explosive devices
  • Lottery tickets
  • Hazardous waste
  • Tobacco products and electronic cigarettes
  • Handguns and other firearms

Additional Shipping Insurance Coverage

As mentioned earlier, any coverage of your FedEx shipment’s declared value requires a $1.30 charge for every $100 over the first $300.

Thus, if your item’s declared value is $500, the additional shipping charge is $2.60 on top of the $3.90 that covers the first $300. 

Your total insurance cost should be $6.50 ($3.90 for the first $300 + $1.30 for each additional $100 x 2).

The Shipping Rate Changes to the FedEx Insurance

In January 2022, FedEx started imposing a 6% late fee on FedEx Express and FedEx Ground customers who failed to pay their invoices within their agreed payment terms.

Furthermore, rate changes to shipping fees and surcharges applied to the following services starting January 4, 2022, affecting the total shipping rate:

Previous Shipment Insurance Rates

Previously, FedEx charged $3 to cover shipments worth between $100 and $300. For every $100 above the first $300, FedEx charged an extra $1.

For international express shipping, FedEx used to charge $1 for every $100 over the first $100 of the package’s declared value. Meanwhile, parcels whose declared value is $250 had a $2 insurance charge.

Comparing Shipping Services’ Insurance Coverage

Other shipping companies can offer insurance for different services and at varying costs. The following sections discuss the insurance costs for the United States Postal Service (USPS) and United Parcel Service (UPS) to help you compare rates.

USPS Insurance Costs

As of July 2023, USPS shipping insurance offers the following coverage:

Desired coverageUSPS insurance fee
$0.01 to $50.00$2.70
$50.01 to $100.00$3.45
$100.01 to $200.00$4.55
$200.01 to $300.00$5.95
$300.01 to $400.00$7.50
$400.01 to $500.00$9.05
$500.01 to $600.00$12.15
$600.01 to $5,000.00$12.15 plus $1.85 for every $100 or fraction thereof exceeding $600 in declared value

UPS Insurance Costs

Shipping via UPS automatically provides a $100 coverage for each label without additional charge.

However, UPS charges an additional $1.05 for every $100 over the first $100, based on 2023 rates. Despite this rate, UPS imposes a $2.70 insurance minimum, so shipments must be worth at least $300 to qualify for UPS shipping insurance.

How Much Is UPS Insurance per $100?

As previously discussed, UPS will charge $1.05 for every additional $100 declared value exceeding the first $100. If your item’s value is $1,000, you must pay $9.45 ($1.05 x 9 = $9.45).

Buying Your Own Shipping Insurance

Since insurance offered by FedEx and other shipping services and carriers is an additional service, you can consider getting coverage from outside options.

For example, a private third-party insurance provider can cater to your coverage and meet your needs. Check your preferred insurer’s conditions and compare rates for more information.

How to Insure Your FedEx Package

Fill out the FedEx shipping form’s value section when you drop off the package for packing and shipping. If your package contains items below $100, you don’t need to worry about buying additional insurance.

Packing Details and Considerations

To help you pack your items properly, FedEx recommends following the general packaging guidelines below:

  • You can use your own packaging, provided your boxes are undamaged and sturdy with all flaps intact.
  • Pack chipboard boxes, like gift or shoe boxes, into a corrugated fiberboard external box.
  • Use double-wall boxes for heavy items.
  • Fully encase your package in an outer shipping packaging or container.
  • Position bottles containing liquids upright.
  • Place items that can be damaged by normal handling in a protective outer box.
  • Wrap items individually using cushioning material and center them in boxes away from other things and the box’s top, bottom, sides, and corners.

Understanding the FedEx Claims Process

You can file your insurance claim online, by fax, or by email to the FedEx claims department.

Filing a claim online lets you receive updates via email. For international shipments, use fax or mail when filing.

Contact FedEx customer service after submitting your claim to receive a case number as a reference if you need to check your claim’s status.

For claims on damages, keep all packing materials, including the box and packing contents, ready on hand, as FedEx can ask to inspect the items.

Deadline for Claims

FedEx imposes varying deadlines for filing claims for the following services:

  • FedEx Ground: You must notify FedEx within 60 days after delivery.
  • FedEx Express: The company must receive a claim notice due to delay, damage, or shortage within 21 calendar days after shipment delivery.

Understanding FedEx Declared Value: What Is Declared Value?

Your package’s declared value represents the company’s maximum liability with the package’s shipment, including, but not limited to, any delay, damage, loss, or misdelivery.

As the shipper, you’re responsible for proving actual damages. Also, you assume the risk of and exposure to any loss exceeding your declared value.

Declared Value Is Not Shipping Insurance

Declaring your package’s value is independent of your insurance arrangement.

Although you can specify your item’s value, you don’t necessarily have to buy insurance from an agent or broker to get coverage for losses outside FedEx’s control, door-to-door protections, reimbursed shipping costs, and expedited replacement goods.

Declared Value Does Not Mean Full Price

Regardless of your item’s value, FedEx’s liability for damage or loss cannot exceed the shipment’s depreciated value, repair cost, or replacement cost, whichever is less.

Furthermore, the declared value doesn’t cover costs due to loss of income or profit, even if the damage or delay will result in such a loss.

FedEx Maximum Declared Values

According to the FedEx service guide, the maximum declared value is $50,000 for packages using any of the following services:

Also, the maximum value you can declare for a FedEx SameDay shipment is $2,000.

Limitations of the $1,000 FedEx Declared Value

FedEx implements a $1,000 maximum declared value for certain shipments, such as the following:

  • Artwork
  • Antiques
  • Collectibles, such as coins, stamps, and souvenirs
  • Films and photographic chromes, images, and slides
  • Jewelry
  • Musical instruments more than 20 years old
  • Precious metals, such as gold and silver bullion

High-Value Jewelry Shipping Program

FedEx Declared Value Advantage is the company’s contract-only service for select customers who frequently ship high-value items, such as jewelry, pearls, gemstones, and precious metals.

If you qualify for this service, you can declare up to $100,000 in value for domestic shipments and up to $25,000 for parcels to select international destinations.

You need a FedEx account to participate in this program. Each Declared Value Advantage agreement has specific terms per customer.

Compare Declared Value and Insurance

As mentioned earlier, the declared value is not insurance. Considering this fact, read the following sections to compare the declared value coverage between FedEx and UPS.

FedEx Declared Value Coverage

If you ship your item without a declared value coverage, FedEx will only accept a $100 maximum liability. As previously discussed, the maximum declared value allowed for several FedEx services is $50,000.

UPS Declared Value Coverage

While UPS’ maximum liability for damaged or lost packages is automatically set at $100, you can still add declared value coverage.

Like FedEx, UPS’ declared value coverage depends on various factors, such as the package type, chosen service, your location, and the destination.

Use the UPS website’s parcel delivery quote calculator if you need a shipping cost estimate with this added coverage.

Determining the Cost of Declared Value

FedEx’s declared value rates are incremental and depend on your item’s declared amount.

The first $100 of your shipment’s value is included with your shipping cost for no additional charge as part of the company’s standard $100 liability limit. Your declared value fees reflect any amount over $100.

Declared value payment is due when you create your shipment and pay the shipping costs.

How to Enter Declared Value When Creating a Shipping Label Online

To enter a declared value on your shipment, do the following steps:

  • Step 1: Sign in to your FedEx account.
  • Step 2: Create a new shipment.
  • Step 3: Under the “Package and Shipment Details” option, enter your package’s weight, package type, and service type. Afterward, enter a dollar amount reflecting the shipment’s declared value.
  • Step 4: Review the declared value cost after calculating the total shipping cost.

What This Means for Shipping-Based Companies

Accurately calculating your shipment’s value is essential to know how much declared value coverage your package needs.

Although you may want coverage, buying more can waste resources.

Check your invoices for more information to determine how much you spend on declared value coverage. Invoices contain information about the exact amount your carrier charges you. This way, you can plan your shipping costs and allocate the proper budget without wasting resources.

Is Shipping Insurance Worth It? Why Should You Consider Shipping Insurance?

If the thought of your items getting damaged or lost along the way causes you anxiety, consider getting shipping insurance for your package.

Insurance can benefit you and your parcel, whether you are a casual or business shipper. The sections below discuss how you can utilize insurance.

The Casual Shipper

Suppose you want to send a package or letter that typically isn’t urgent or valuable. You may not need shipping insurance unless that item has significant value to you or your recipient.

The Business Shipper

If you’re a business shipper, you will likely ship valuable items regularly. High-volume orders mean some of your packages will probably get damaged or lost.

The more valuable your goods, the more likely you’ll lose without insurance. If you run an eCommerce business that ships expensive items, consider including insurance.

When in Doubt, Get Shipping Insurance

Whether you are a business or casual shipper, consider getting insurance if you believe you will need it.

Shipping insurance only costs a fraction of your declared value. If your package is valuable enough to have insurance, this small investment may be worth getting, especially if something goes wrong.

Shipping With Greater Confidence

Many companies ship numerous packages yearly, and most of those items will likely arrive without damage and on time. Still, a few cases can go wrong during the shipping process.

If a package gets damaged or goes missing, the customer can become unhappy and demand a resolution.

Although taking care of the customer is a priority, the company still needs to recover the losses due to such events. 

Understanding what insurance coverage offers and developing internal policies for addressing such situations can help create smooth experiences and minimize potential loss for the customer and shipping company.

FedEx Freight Rates

FedEx’s freight rates vary depending on various factors like the item’s weight, destination, and add-on services.

Based on FedEx Freight’s zone-based rates as of January 2023, the minimum charge for items weighing 1lb to 150lbs starts at $435 for FedEx Freight Priority and $414 for FedEx Freight Economy.

About FedEx

FedEx Corporation offers a broad portfolio of transportation, eCommerce, and business services to customers and businesses worldwide.

With a $90 billion annual revenue, FedEx provides integrated business solutions through companies operating collaboratively, innovating digitally, and competing collectively. Among the company’s services is FedEx Express, which provides rapid, time-definite, and reliable delivery to over 220 countries and territories. This service connects markets comprising more than 99% of the worldwide gross domestic product.

References

  1. UPS vs. FedEx: What’s the Difference?
    https://www.investopedia.com/articles/markets/120115/ups-vs-fedex-comparing-business-models-and-strategies.asp
  2. Price List
    https://pe.usps.com/text/dmm300/Notice123.htm