Swipe Team
October 28, 2025
6 mins 
If you run an online business, you’ve probably wondered if paying for shipping insurance is really worth it. With shipping costs and extra fees always going up, it’s important to be smart about how you spend your money.
Shipping can be risky. In fact, 72% of small and mid-sized businesses say problems like lost, stolen, or damaged packages have hurt their customer reviews in the past year.
In this post, we’ll break down the pros and cons of shipping insurance and show you a better option that helps your business save money and keep customers happy.
What Does Shipping Insurance Cover?
Shipping insurance (also called package insurance or package protection) helps you get your money back if your package is lost, stolen, or damaged while being shipped, either in the U.S. or to another country. It can cover both the cost of the item and the shipping fee.
How Much Does Shipping Insurance Cost?
The price of shipping insurance depends on how much your package is worth. Many U.S. businesses work with big shipping companies to get special deals and custom plans that fit their needs. Some choose to buy insurance from other companies instead. Sometimes, a third-party shipping partner (3PL) can also help you get coverage.
According to ShipBob, using a third-party shipping company can sometimes cost less than using big carriers. Most major carriers also include free coverage for packages worth up to $100 when shipped within the country.
How Does Shipping Insurance Work?
Every shipping insurance company is a little different. Each one has its own rules, limits, and what it will or won’t cover. Before you choose one, make sure it protects all of your most valuable items.
Once your insurance is set up, if a package that’s covered gets lost, stolen, or damaged while being shipped, you can file a claim to get your money back. To do that, you’ll need to show proof of how much the items were worth.
For example, if you file a claim with USPS insurance, you’ll need to show proof that you had insurance, proof of what the item was worth, and proof that it was lost or damaged.
How Long Does It Take to Process and Resolve Claims?
It usually takes about 7 to 10 days for a shipping company to look for a lost or missing package and process your claim. After that, it can take a few more days to get a final answer or a refund.
It’s also important to know how long you have to file a claim. Each shipping company has its own rules. With USPS, you need to file within 15 to 60 days. UPS gives you up to five months, and FedEx allows 60 days from the date of your order.
Pros and Cons of Shipping Insurance
If you’re sending something expensive, the last thing you want is for it to get lost, stolen, or broken. But is it really worth paying extra for shipping insurance?
Pro: No More Out-of-Pocket Costs for Lost Packages
If a package isn’t insured and it gets lost or damaged, you lose that money. When you add up what the item costs and what you paid for shipping, it can turn into a big loss.
Con: Adds Extra Workload for Your Shipping and Support Teams
Shipping insurance can help cover the cost when a package gets lost, stolen, or damaged. But it still leaves a lot of the work on you as the store owner. You or your team will have to file each claim and keep track of it until it’s solved, which takes time and effort.
Even though shipping insurance can save you money in the long run, it also adds extra work to your business. If you ship a lot of orders, your team might spend hours filing claims and making sure they’re handled correctly.
To make things easier, set up a clear system for collecting the info needed to file claims. Make sure your customer service team knows what to ask for and how to handle it so the process stays simple for your customers.
Shipping Insurance vs. Extend Shipping Protection: What’s the Difference?
Today’s shoppers are picky about where they spend their money. They want good value, easy shopping, and peace of mind when they buy something. Stores that give customers shipping protection show they care, which helps shoppers feel safe buying from them again.
Extend Shipping Protection makes things simple for stores. It takes care of service requests, shipping issues, customer support, and replacement costs so store owners can focus on keeping their customers happy and coming back for more.
1. Quicker, Simpler Service Requests and a Better Customer Experience
Fix tech problems fast — in just seconds or minutes instead of waiting days or weeks. When a customer sends a quick online service request (no receipt needed), Swipe.ai starts working right away to make sure they get a replacement product as soon as possible.
2. Lower Costs and Fewer Extra Expenses
When a package gets lost, the store has to fix the problem by sending a new one, and that can get expensive fast. Along with replacing the item, stores also have to spend time and money helping customers and solving shipping problems.
For businesses that want to keep growing, these costs can hurt profits. With Swipe.ai, replacement products count as new sales instead of extra losses. We handle shipping issues so your team doesn’t have to, saving time and reducing stress.
3. Peace of Mind for You and Your Customers
Shipping protection helps customers feel safe about their orders. It covers packages that get lost, damaged, or stolen and makes sure deliveries arrive as promised. With Swipe.ai, shoppers can buy with confidence knowing their orders are protected.
How Shipping Protection Can Help Cut Your Shipping Insurance Claims in Half
Filing an insurance claim can take a lot of time, especially if you don’t have all the right papers ready. With Swipe.ai, we handle the whole process for you so you can stay focused on your business.
Reach out to us today to see how we can help your business save money and grow.