Buying shipment protection from FedEx/UPS is convenient, but it's substantially more expensive and less useful than shipping insurance. Here's everything you need to know about protecting shipments in 2025.

Quick summary

There are 2 ways to protect your shipments:

Type	Offered by	Convenience	Coverage	Cost
"Declared Value"	FedEx, UPS	High	Weak	1-4%
Shipping insurance	ReReady, etc.	Medium	Strong	1%

Pro tip: If you're shipping something worth less than $100 and you aren't worried about loss or theft, use the free carrier liability. Otherwise, get much better protection by buying your shipping labels through a service that makes it easy to add real shipping insurance.

Carriers don't sell shipping insurance

When you're buying a shipping label from a carrier like FedEx or UPS, they ask you to pay more "in case of damage".

Yes, they're asking you to pay extra so they will perform their core service competently. As bizarre as that is, it's the industry standard.

However, they're not selling insurance. They're selling something more expensive and less useful than insurance. They call it "declared value".

When a shipment has a declared value, the carrier accepts some financial liability for the value you declared. But the carriers emphasize "declared value is not shipping insurance." So if it's not insurance, what is it?

"Declared value" liability is limited

When a carrier accepts liability for your declared value, you are entitled to reimbursement at the lowest possible cost if you can prove the carrier damaged your shipment. The lowest possible cost is the cost of repair, the depreciated value, or the replacement cost - whichever is least. Further, you must prove the contents of the shipment were damaged by the carrier.

1. Only covers damage (not loss or theft).
2. Requires proving carrier negligence.
3. Covers the lowest amount between repair/depreciation/replacement.
4. Does not cover shipping costs.

Basically you have to pass a high bar just to get a partial reimbursement.

Insurance is better

Where declared value liability is heavily constrained, insurance coverage is far broader:

1. Covers damage, loss, and theft.
2. Does not require proving carrier negligence (it's assumed).
3. Covers the full value of the shipment at it's original price.
4. Covers shipping costs.

Basically, insurance is better than declared value liability in every dimension.

FedEx Declared Value

According to the FedEx Service Guide for 2025, they charge the following rates for "declared value" liability:

Declared value	US Package Services except SameDay & International Ground	Percent cost
Up to $100	$0	0%
$100.01 to $300	$4.50	2-4%
$300.01 to $50k	$1.50 per $100	1.5%

For example, the cost of a declared value of $1,000 would be $15.

Also, note that FedEx automatically adds Direct Signature Required if your shipment's declared value is $500 or more. It's free, but it can be inconvenient if you don't want to require a signature.

Interestingly, FedEx pricing is substantially higher than UPS, which we'll cover next.

UPS Declared Value

According to the UPS Value-Added Services menu for 2025, they charge the following rates for "declared value" liability:

Declared value	US Domestic & International	Percent cost
Up to $100	$0	0%
$100.01 to $400	$2.70	1-3%
$400.01 to $50k	$0.90 per $100	1%

For example, the cost of a declared value of $1,000 would be $9.

Who handles claims?

Generally, whether your shipment has "declared value" or insurance, you're responsible for filing any claim. You will need to draft the claim, gather the proof, and respond to any rejection.

Pro tip: Buy your shipping labels through a service that handles insurance claim-filing on your behalf. For example, if you're shipping laptops or other devices, try ReReady.

Disclaimer: We are not your attorney, and this post contains no legal advice or guarantees of any kind. This post simply contains ideas you may wish to share with your attorney.