How to calculate the cost with insurance for an expensive item

[johdevas]

I usually ship items that are at or under $300. 

I have an item I'm looking to sell, it's a new unopened ECU for an outboard. It retails for $2650. 

I haven't sold anything this expensive before and I want to be sure to put the right shipping amount that includes full insurance. This item is very difficult to come by as they are back-ordered worldwide. I happened to not need the one I was able to get. ( I was able to get it from my oem supplier at no shipping cost, so it's not as if I could look at that invoice).

I don't want to just throw out a number and hope I'm right or wrong. I did see there was someone who was selling a pair of used ECU's but he had like $180 for shipping. These aren't large items, the box could fit within a USPS flat-rate large box no problem. Even then that amount he had on there seemed excessive. Do I do half that? match that price? 

Every online calculator I've seen wants to know the destination, but I don't have one yet. Do I pick the furthest possible destination it could go to and just go with that amount?

Thanks for your help. 

[dolcetreasures]

Insurance is typically not worth the cost. You will get exactly $0.0 from them if the item arrives broken barring them literally destroying the box, and even then, they will never pay out without the buyers cooperation which you will likely never get. The only benefit of insurance is in case the item is lost, but this is very very unlikely. I mark my packages with a fragile sticker, the ones that suggest there is glassware in the package. It makes it less attractive to would be thieves as they’ll typically pick a different target. 

[nobody*s_perfect]

You would set up the shipping cost using calculated (not flat rate) shipping, and enter a handling fee that is appropriate for the cost of insurance to cover the anticipated selling price.  Or if you're selling at a fixed price (rather than auction), just add the insurance cost into your asking price.

Depending on the weight of the package, you might want to use that Large flat-rate box or at least offer it as a second option, because it will be cheaper than weight-based shipping if you're sending more than 3 pounds to Zone 8, more than 4 pounds to Zone 7, etc.

[johdevas]

That's my question though, how do I come up with the amount that the insurance is going to be? I have no way of knowing what USPS or UPS would charge for it without knowing where it's going to. 

[ms.rodriguez* · Accepted solution]

You do NOT need a zipcode to get an insurance cost.  Go to www.usps.com and look in there . Remember, anything that you ship that is $750.oo MUST have SIGNATURE CONFIRMATION and YOU have to pay for it. You can't ask the buyer for that money or the insurance money.  You need to roll these 2 costs into the starting price or the shipping price.

If you state 10.oo shipping  don't state that also includes insurance.  Insurance is ONLY for the seller.  The buyer does NOT want to pay your insurance.  That is why I say to roll it into the starting price of the item.  Goodluck.

[stainlessenginecovers]

Just go to the carrier website; use the furthest zip code (insurance isn't affected by distance anyway) and get a price. 

Know that the max insurance will NOT cover your item (I believe max is $1000 on usps)-you would have to use Fedex/UPS for higher amounts but know that if there's a problem, those shipping accounts belong to ebay so it's very difficult to get them to talk to you.

Also note- as already stated, insurance is usually only good if the item is 'lost' and shows 'lost' or 'never delivered' by the carrier tracking. If it shows delivered and buyer says they didn't get it, it's NOT covered. Damage? seldom, very very seldom covered. 

[nobody*s_perfect]

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@johdevas wrote:

That's my question though, how do I come up with the amount that the insurance is going to be? I have no way of knowing what USPS or UPS would charge for it without knowing where it's going to. 

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Insurance is not based on distance, it's based on selling price so you'd have to estimate the expected selling price for the item.  USPS insurance costs $1.65 per $100 increment, but that's going up to $1.75 on January 22.  As noted in another post, they rarely pay off for damage claims.

[varebelrose]

"Insurance is typically not worth the cost. You will get exactly $0.0 from them if the item arrives broken barring them literally destroying the box, and even then, they will never pay out..."

Granted I have only had to make 3 or 4 claims, but had absolutely no problem being reimbursed for the loss (minus shipping cost, of course) when using USPS insurance. One was even for a $2500 laptop that they managed to get soaking wet and ruined. You just have to follow all the steps  and provide the documentation as required.

[varebelrose]

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@johdevas wrote:

That's my question though, how do I come up with the amount that the insurance is going to be? I have no way of knowing what USPS or UPS would charge for it without knowing where it's going to. 

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Insurance cost is based on the item value, not its destination, at least within the US. I have no idea how it works internationally, but hopefully you are not going to assume that risk on such a high value item.

[nobody*s_perfect]

But have you filed a claim within the past 2 years?  USPS now requires the package recipient to take the damaged item and packaging to their local PO in almost all cases, whereas in the past they rarely did that and were usually willing to pay off based on photo evidence. They have become stricter and perhaps arbitrary in denying claims even when the buyer cooperates, usually citing inadequate packaging.

[varebelrose]

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@nobody*s_perfect wrote:

USPS now requires the package recipient to take the damaged item and packaging to their local PO in almost all cases, whereas in the past they rarely did that

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Not within the last two years, but (in my experience) they always required the item to be returned to the post office. I just had the buyer do a return and took it in myself.

[ms.rodriguez*]

Some things can't be insured like currency.   So check www.usps.com before you list an item that is pricey.

[johdevas]

I wasn't trying to ask the buyer for the insurance cost after the fact. I was trying to come up with an idea to set the price at beforehand which includes the signature and the insurance cost built into the listing. 

I wasn't aware of needing a signature on that high an item, so thanks for that tip. Someone else mentioned that the max USPS would insure for is 1000 so then I'll have to go with UPS and I see their website has a similar calculator, selecting the furthest possible spot which would be Hawaii actually, I tried Alaska first and it is a bit more. 

[nobody*s_perfect]

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@johdevas wrote: .... Someone else mentioned that the max USPS would insure for is 1000 so then I'll have to go with UPS and I see their website has a similar calculator, selecting the furthest possible spot which would be Hawaii actually, I tried Alaska first and it is a bit more. 

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As you can see in the image that I provided above, USPS will insure up to $5,000.  IIRC, there is a $1K limit if you purchase postage online. In case you want to verify this, the image is from the USPS basic rates publication, Notice 123:

http://pe.usps.com/cpim/ftp/manuals/dmm300/notice123.pdf

Simple solution if the value exceeds the amount allowed with online postage: Purchase your postage at the retail rate, at your local PO counter. For such a large sale, the extra postage cost increment is insignificant.  The retail cost for a Large flat rate box is only $2.50 more than the online cost.

Even if you go with UPS, you still don't need to pre-calculate a shipping cost if you set up calculated shipping. You just need to add the cost of signature and insurance as a handling fee or as part of your item cost.  If you charge a flat shipping cost based on the cost to ship your item to HI, AK or even California, you might lose a lot of potential buyers for your rather specialized item.

Also, if you want to know what a shipping label will cost you if you purchase it through eBay, then you should be using the eBay shipping calculator, not the one at the carrier's web site.

http://www.ebay.com/shp/Calculator