How Does FedEx "Declared Value" Work?

[Dizzie]

I am not inviting horror stories about denied claims. I have always wondered how Declared Value works. Store clerks are clueless. All they can tell me is it isn't really "insurance" and it is by a third party.

I think the insurance rate is somewhat high especially if something is only getting shipped a short distance. I am inclined to insure for what I think the cost of repair, not replacement might be. That also gets a signature automatically if the amount is over $500(?).

If a $6K item is sent Declared Value $1500 and it is damaged what happens? Will "they" look at actual repair cost or just pay the $1500 and keep the item? Does the shipper have the option of having the item returned? I assume that would be without payment from the third party and would be like having no insurance at all so why spend the money.

 

[jdandy]

Dizzie.......I found this in a brief search:

Per Fedex:

"The declared value of any package represents our maximum liability in connection with a shipment of that package, including, but not limited to, any loss, damage, delay, misdelivery, nondelivery, misinformation, any failure to provide information, or misdelivery of information relating to the shipment. It is the shipper's responsibility to prove actual damages. Exposure to and risk of any loss in excess of the declared value is assumed by the shipper. You may transfer this risk to an insurance carrier of your choice through the purchase of an insurance policy. Contact an insurance agent or broker if you desire insurance coverage. WE DO NOT PROVIDE INSURANCE COVERAGE OF ANY KIND. "

 

[sheltie1]

In my experience, if you ever have a claim, you will have to prove to Fedex, via purchase invoices/receipts/etc of what the value of the item is. If the item is not new that you are shipping, it becomes a tad harder on the payout.

In your example, if a $6k item is sent insured for $1500, and it's damaged, you have to first prove the damage (they may send someone to see it in person) and then prove the value of the item. They will only pay up to the $1500.....if it cost's $800 to repair (for example), then that is what's paid. If it's totaled or the repair cost exceeds $1500, they will only pay up to the $1500.

As you have noted, the insurance options (for both Fedex and UPS) are fairly pricey.

 

[Dizzie]

I get that the transporter's maximum liability is the amount of the Declared Value. My question is do they pay that amount and then keep the item even if it is wort a lot more or could that money be put toward repairs. It is about the shipper trying to cover any minor damage (eg dinged face-plate or loose transformer) but not cover complete loss which would be more rare especially for short distances.

Exactly what this translates to confuses me (and I used to deal daily with federal and state hazardous waste regulations). I was hoping someone was unfortunate enough to have first hand experience. :|
"Exposure to and risk of any loss in excess of the declared value is assumed by the shipper."

 

[ICTWoody]

I had a pair of KEF R500's get damaged in shipping to a friend of mine. The declared value was the new retail price. The damage was only slight and on one speaker. It took a bit of convincing and phone calls and pictures and emails, but ultimately they paid out a depreciated value of the single speaker and my buddy kept them. He wound up with the speakers for about $500 out of pocket and the damage isn't even visible from the front when seated. He was happy.

- Woody


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