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Tips for Insurance Claims

Understanding the ins and outs of how insurance works on Pirate Ship

Updated over a week ago

Insuring your shipments is crucial to protecting yourself, either from lost packages or damaged items. Here are some things to keep in mind when you’re dealing with insurance.

Insure your shipment for the item cost AND the cost of shipping when buying insurance through Shipsurance

  • The cost of postage isn’t automatically included in insurance through our third-party provider, Shipsurance, and should be added to your total declared package value, as seen here:

Some items must have Signature Confirmation to qualify for coverage

In order to insure certain items, you need to pay for Signature Confirmation. Be sure to read the Shipsurance Terms and Conditions to ensure you’re properly shipping your items 👍

Here are the items that require Signature Confirmation in order to be insured:

  • Jewelry with a value over $1000

  • Laptops, tablets/iPads, mobile phones

Note: this excludes a number of items from coverage when shipped internationally with USPS, since USPS doesn't offer Signature Services for international shipments. UPS, on the other hand, does!

Pro Tip: Shipsurance has strict guidelines around Signature Confirmation and coverage for shipments. If one item in a package requires a signature and the label you bought doesn't include Signature Confirmation, the entire shipment is void from coverage.

Items may be excluded from coverage if they weren't paid for by your recipient

Shipsurance won't cover items that are shipped without your recipient paying for them first 🙈 Per their Terms and Conditions, this includes any merchandise shipped on consignment, memorandum, or approval unless shipped in fulfillment of an order.

Shipments of gifts are not excluded from coverage, as long they have a pre-shipment Recent Invoice or Recent Appraisal (any appraisal that took place within the last 60 days is considered recent).

Payouts for insurance claims may not include taxes and fees

Shipsurance includes coverage for taxes in their claim payouts 🎉 That said, this depends on the invoice value of your package, and whether the taxes are included in the order invoice. If taxes are included on the order invoice, Shipsurance will include them in their claim payout as long as you purchased enough coverage for them (i.e. whether you included the taxes in your Declared Value).

However, if you are filing a claim for an order that took place on either Etsy, eBay, or Reverb, Shipsurance will not include taxes in the claim payout. This is because these three platforms reimburse taxes directly once you (the seller) refund the buyer through the platform.

UPS carrier liability does not cover taxes and fees. Therefore, those amounts won't be paid out with the $100 of carrier liability when filing a UPS claim.

Insurance payouts only cover the declared value of your package (and the cost of shipping, if you included it in your declared value)

The claim payout amount you may receive is only based on the original invoiced amount and your shipping cost, which should both make up the total declared value of your package. That means Shipsurance and UPS don't cover replacement costs or any import fees on international shipments, which may include customs duties, broker fees, and other fees incurred outside of the shipping cost and the declared value of your package.

In other words, when filing an insurance claim, you cannot claim anything extra outside of the original invoiced amount and your shipping cost.

Also, note that the amount you paid for insurance is not reimbursed to you when Shipsurance pays out a claim. If you get your postage cost along with the item cost refunded from Shipsurance (if you added it to your declared value), you won't also get the insurance premium back.

Pro Tip: Per their policies, Shipsurance covers whichever is the greater amount: the shipping cost displayed on your order's invoice, or the cost of the label you bought on Pirate Ship. For example, if your label costs $10 but you charged your customer $30 for shipping on the order invoice, Shipsurance will cover the $30 but not the $10 label.

USPS & UPS insurance claims are different from Shipsurance

It's important to note that insuring both your product cost and the cost of postage specifically refers to Shipsurance claims. Insurance claims for the built-in coverage included with UPS and USPS labels (Ground Advantage, Priority Mail, and Priority Mail Express only) are different, depending on the type of claim you need to file. Here's a quick breakdown:

USPS claims:

  • When filing a missing package claim with USPS for Ground Advantage, Priority Mail, or Priority Mail Express shipments, there will be a field available in the claims form to declare your postage cost. There, you'll need to enter the value you paid for postage in Pirate Ship and must use your Shipment page as proof of payment. USPS will provide compensation for the postage cost for missing package claims.

  • For claims for damaged packages, you cannot request compensation for the postage cost. USPS has fulfilled the underlying service that was paid for (transit and delivery of the package), even if the contents were damaged in the process. Unfortunately, you can only claim the product cost in the USPS claims process, and USPS will not provide compensation for the postage cost for damaged claims.

UPS claims:

  • With UPS claims, the postage cost is always refunded regardless of whether you file a claim for a damaged or missing package. UPS carrier liability includes up to $100 in coverage for your product cost, and the postage cost is also refunded outside of that. For instance, you could claim $100 in product costs and receive a total payout of $120 if your label was $20. This coverage is included with all UPS labels, regardless of the service type.

3rd party insurance can "stack" on top of built-in carrier insurance

Third-party insurance that Pirate Ship offers can be "added on top" of the built-in USPS insurance and UPS carrier liability... but you can also choose to insure your shipment solely through Shipsurance.

When purchasing additional coverage for your shipment through Shipsurance, you have two options:

  1. Insure the full value of the product you're sending by entering its full value in the "Declared Value" field (this is what we recommend)

  2. Underinsure your product and expect to file a separate claim with either USPS or UPS (for example, if you're sending a Priority Mail package worth $400, you can choose to enter just $300 in the "Declared Value" field when adding insurance to your label, since Priority Mail labels on Pirate Ship come with $100 of built-in insurance already)

With Option 1, the entire process is streamlined through Shipsurance. Sometimes, they may still ask you to file a claim with the carrier... though, for most claims, the process stays with them. This is why we recommend this option; it's easier because you only file one claim!

With Option 2, you'll need to file a claim with Shipsurance and with either USPS or UPS for the remaining value of your shipment.


  • USPS Ground Advantage labels come with $100 of included coverage

  • Domestic Priority Mail labels come with $100 of included coverage

  • Priority Mail International labels come with $200 of included coverage

  • All UPS labels come with $100 of built-in coverage

  • First Class Package International, Media Mail, and Simple Export Rate do not have included carrier coverage

  • Always include the cost of postage if you will look for that to be reimbursed if/when a claim is needed

To file a claim, you need to provide an invoice and proof of payment

  • An invoice from an eCommerce platform should do the trick here, as long as it shows the total amount paid and the buyer of the item 👌

  • Screenshots showing an agreement on an item/value exchange will also work, as long as you have proof of payment from the recipient that clearly shows the intended item for purchase.

    • Our insurance team needs to be able to clearly see the agreed-upon price for the item (for example, either through an eBay listing or conversation on Facebook messenger) and that funds were actually exchanged (i.e. a credit card payment, Venmo transaction, etc)

  • For high-value or collector's items, appraisal before shipping is crucial. This gives us a clear picture of the value of the item and allows Shipsurance to cover any losses. If you don't obtain an appraisal for collector's items or rarities before shipping, there’s a possibility the claim will be denied. Trading cards and antiques are two examples of items that require an appraisal.

Note: For claims filed with Shipsurance, only the shipper can file a claim as they are the individual who purchased the coverage policy.

For Priority Mail claims, the shipper or recipient can file a claim with USPS through their portal.

For UPS carrier liability claims, get in touch with us via live chat or email us at so we can file the claim on your behalf 😊

Make sure your shipment is accurately addressed

Shipsurance will deny claims for shipments that were insufficiently addressed. This means packages going to the wrong address, packages that were returned to sender due to a missing apartment number, and invalid addresses that aren’t recognized by the USPS database.

You can verify any domestic address by typing it into SmartyStreets ✔️ It'll let you know if you are missing an apartment number, misspelled a street name, or even if the address can’t be found in the USPS database!

Taking photos of packaging is helpful, especially for fragile shipments

When you take photos of your packaging, you can show Shipsurance that you packaged the item properly.

  • If an item does arrive damaged, Shipsurance will ask for the recipient to take photos of the packaging and the damaged item.

  • Taking photos beforehand will help work around the recipient throwing packaging away, as they often do.

For damaged shipments...

  • The recipient needs to declare damage within 15 days of receiving the shipment. If we don't file the claim within 15 days of delivery, Shipsurance may deny it 😢 However, if you have dated correspondence showing that your recipient contacted you within the proper timeframe, we can still file a claim after 15 days.

  • Shipsurance will often ask for a repair estimate, which is standard practice for insurance companies. Shipsurance keeps your claim open for 120 days after the Ship Date, so you should have plenty of time to get an estimate for your item.

  • NEVER have your recipient ship a damaged item back to you. This will almost always disqualify you from filing a claim, since additional damage will likely happen as the item travels back to you. Plus, coverage you purchase from Shipsurance is only active for the initial transit, and not a return trip 😉

For lost shipments...

  • At times, Shipsurance will require your recipient to fill out an affidavit. Pirate Ship will file your claim and send this link over to you for you to pass onto your recipient ✍️ This is also standard practice.

  • If you’re unable to contact your recipient, screenshots of a refund/replacement and screenshots of your attempts to acquire the affidavit signature can be used.

  • Shipsurance might also ask that you file a Missing Mail Search Request with USPS to find your shipment, or to begin. This means Shipsurance is looking to see if USPS/UPS is able to locate your shipment. USPS/UPS should get back to you relatively quickly, and Shipsurance will keep your claim open until we get confirmation from USPS/UPS that the shipment is in fact lost.

Proof of acceptance scans...

In order for insurance claims to be valid, Shipsurance requires proof of a carrier acceptance scan. For USPS packages, End-of-Day SCAN Forms and scans from the self-service kiosks at Post Offices aren't considered proper proof in this case.

Best practice here is to provide screenshots of either USPS or UPS accepting your package from their built-in tracking portal. You can obtain this by typing your tracking number into either of the following, depending on which carrier you shipped with:

Pro Tip: Obtaining drop-off receipts from USPS or UPS that specifically list the tracking numbers tendered over the counter is helpful!

If Shipsurance pays out a claim and the package gets delivered...

If a claim is processed and paid out and the shipment ends up getting delivered, Shipsurance will request a reversal on the payout for your insurance claim 😅

  • If you've replaced or refunded the recipient, sometimes you will still experience a loss. Other times, the delivery of your shipment simply fixes everything! Whatever the case, if you run into any trouble with this process on your end, let us know and we’ll take a look at our options.

For packages with both Priority Mail insurance/UPS carrier liability and Shipsurance...

If your package has both Priority Mail insurance/UPS carrier liability and Shipsurance coverage, Shipsurance can ask that you also file a claim with USPS or UPS (depending on which carrier you shipped with).

  • Built-in USPS insurance and UPS carrier liability can “stack” on top of Shipsurance - here's how to combine third-party insurance with built-in carrier insurance.

  • In these situations, you’ll file your insurance claim with USPS/UPS and then send over proof of the payout you receive from them. Shipsurance then will pay out the remainder so you’re fully covered for any losses.

Use UPS to insure an international shipment that needs signature confirmation

Shipsurance will only cover international packages that contain certain items if you purchase Signature Confirmation service along with your label. The problem is, USPS doesn't let you add Signature Confirmation to any of their international services 😜 But UPS does! So, if you're sending an item internationally that requires Signature Confirmation in order for Shipsurance to cover it, you'll need to use UPS.

Look out for your eCommerce platform's shipping and return policies

Sometimes your eCommerce platform's return policies may interfere with your insurance claim through Shipsurance. For instance, eBay has a policy requiring your buyer to ship your item(s) back to you within 15 days once a return is accepted. The problem is, Shipsurance considers this return "a second transit" after the insured transit you paid for initially when you bought your label on Pirate Ship...and they may deny your claim because of it.

So, if you're filing an insurance claim through Shipsurance, the best thing to do is tell your buyer to not return the package to you until the claim has been processed. In this case, following your eCommerce platform's return policies is at your own risk.

Contacting Pirate Ship's insurance team

Once we file a claim on your behalf, our insurance team is only available to contact through email. Our live chat support team doesn't have access to claim information, so if you'd like to request an update, please reply to the original email you received notifying you about your claim.

Also, don't worry if you don't hear from us for a little while - our insurance team will always proactively email any claim updates once we get them from the insurance company! We’ll always aim to get back to you within 3-7 business days tops 👌

We're on your side!

Remember, our role in this whole process is to act as your advocate! We’ll take your evidence and file your claim for you, and if you need a hand dealing with the requests Shipsurance sends over, we’re always happy to help.

  • Keep in mind that you are purchasing Shipsurance coverage, so while we’re happy to lend a hand with navigating the filing process, we cannot force Shipsurance to cover losses.

  • If Shipsurance asks for something or closes your claim for a reason you don’t feel is fair, let us know and we can appeal their decision on your behalf!

Additional Resources:

Any questions? Chat in with our Support Crew 😃

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