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Postal Insurance

When talking of insurance, it’s easy to think only of traditional insurance types, like life, health or home insurance. These are the types you pay a monthly premium for, dishing out cash every month, for a possible pay off when something bad happens, like a car accident, or a disease. But the fact is insurance exists in every industry and comes in every type. For example, when you ship an envelope or package somewhere, you can get postal insurance.

Postal insurance has existed for a long time. Sometimes referred to as shipping insurance, it serves the same goal as any other normal type of insurance. The point of all insurances is to manage risk, and handle the unknown. In the case of a car, for example, your insurance covers potential accidents. If someone isn’t looking where he’s going, and collides with you, then his insurance will pay for the damage he caused to your car. This way you won’t have to pay out of pocket, or hope that the other person has money to pay for your repairs. In the case of a package that you send across the country by mail, the principle is the same. If something happens to the package, then usually either the sender or receiver would have to handle the problem. If it’s something that’s been sold, and there’s money involved, it quickly becomes a much more tricky situation. This can easily lead to disputes and arguments as to who is responsible for it. With postal insurance, the company shipping the package, or the postal office if you’re sending through them, takes responsibility for the well being of whatever you’re sending.

Typically, postal insurance is for a certain value. If you send a package that has a value of $200, then you’ll take an insurance for that amount. There’s also no monthly premium, instead you pay a supplement on your initial cost for sending the package, and then the insurance is added. The idea is that the shipping company hopes that nothing will happen to it, and then it’s pure profit for them. However, if they lose it, then they will have to pay you a lot more than what you paid for the insurance, but since a lot of other people didn’t get their packages lost, then they can afford to pay you with that money. Whether you should take postal insurance or not is another matter. The chance of a package being lost is small, especially with tracking numbers. Also, stealing items from the postal service is a federal offense, a very big crime, and few people risk it. Still, there’s many vulnerable points, like when the package gets home. If you aren’t there, then it may be left in your mail box or on the ground in front of your door, where anyone can see and steal it, so there is a risk.

Typically, insurance isn’t taken except if there’s a reason for it, or if it’s already included in the price. For example, Express Mail includes a $100 insurance for US shipping. While insurance can’t replace sentimental values, if what you’re shipping has a monetary value, you may want to look into postal insurance.