How does the USPS determine insurance rates?


Quick Answer

The U.S. Postal Service determines insurance rates according to the sender's declared value of the item, reports USPS. The maximum insurance liability for postage items is $5,000 as of 2015. Some postal services include a small amount of insurance in the postage price.

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Full Answer

Priority Mail service includes complementary insurance of up to $50, and Priority Mail Express includes insurance of up to $100, explains USPS. For additional insurance as well as insurance for First Class Mail and Standard Post Media Mail, USPS uses an insurance chart whose rates rise in increments. Some qualifying standard mail items are eligible for bulk insurance rates. USPS labels all insured items with forms and bar codes based on their value. Mail that is ineligible for postal insurance includes commercial items that customers did not order, items too fragile for safe mailing, and items that are not safely packaged.

When buying insurance, senders must declare the value of items accurately, because if they need to file a claim for loss or damage, they must show proof of value, advises USPS. This can be the original sales receipt or invoice, paid bills for repair, or credit card bills. Additionally, the customer must retain the original mailing receipt or outer packaging that proves that the sender insured the item. The USPS prefers that customers file insurance claims online, but they can also send claims by mail accompanied by USPS Form 1000.

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