Let’s clear up the most common and costly misunderstanding in shipping: FedEx’s “declared value” is not an insurance policy. Believing it is can leave your business exposed to significant financial loss. While FedEx is a reliable carrier, damage and loss are inevitable parts of logistics. Relying on the carrier’s limited liability means the burden of proof is on you, and many claims are denied. To truly protect your assets, you need to understand the system. We’ll explain the critical differences between declared value and actual FedEx insurance alternatives, the complex claims process, and how to build a shipping strategy that truly covers your business.

When serving customers, companies have many considerations, including delivery, shipping service, and its impact on the customer experience. When evaluating shipping options, there are a number of variables, including cost, value, and dependability that must be taken into account. But companies also must plan for what happens when something goes wrong. A customer calls and complains that a package didn’t arrive on time, or equally as serious, the package arrives broken or in poor condition. The first priority is finding a resolution for that customer, but what amount, if any, can you recover for the loss? FedEx is a popular carrier choice, shipping 14 million packages to 220 countries and territories daily. The company offers insurance to handle these types of situations, but how much does it cover, and what is the cost? Understanding the pros and cons of FedEx shipping insurance can help you decide what role, if any, this option should play in your business operations, especially when considering insurance coverage for international shipments. .

What is FedEx Shipping Insurance?

FedEx offers insurance through its service to help offset the cost if a package is lost, stolen, or damaged. The first $100 of insurance doesn’t cost anything, but if the value of the package is higher, you can purchase additional coverage to cover potential losses. There is a small risk of package loss during transit, but damage is more common, even when using FedEx service like FedEx Ground Economy. One study found that up to 11 percent of packages are damaged during transit. Damage results by carrier vary, but the study found the following percentage of damaged packages by carrier:

UPS: 11 percent
USPS: 10 percent
FedEx:7 percent

FedEx had the smallest percentage of damage in this study, but in these events, shipping insurance helps offset the cost. Purchasing the right amount of insurance is key and involves stating a “declared value.”

FedEx Declared Value vs. Shipping Insurance: What’s the Difference?

It’s easy to see the term “declared value” and assume it’s just another name for shipping insurance. However, this is a critical misunderstanding that can cost your business a lot of money. While both concepts relate to protecting the value of your shipment, they operate under completely different principles. Understanding this distinction is the first step in creating a shipping strategy that truly protects your assets and your bottom line. Let’s break down what declared value really means, what it takes to file a successful claim, and what the process actually looks like when something goes wrong with a shipment.

Declared Value is Not Insurance

Let’s clear up the most common point of confusion right away: FedEx’s declared value is not an insurance policy. In fact, FedEx is very clear that it does not provide insurance coverage. Instead, declared value represents the carrier’s maximum liability for a shipment if it is lost or damaged due to their fault. Think of it as a cap on how much you can possibly recover from FedEx. For any shipment, FedEx automatically includes a liability of up to $100. By declaring a higher value and paying an additional fee, you are essentially increasing that liability limit, not purchasing a comprehensive insurance plan that covers any and all potential issues.

Proving Carrier Fault is Required

Here’s where the difference between declared value and true insurance becomes most apparent. With declared value, the burden of proof falls squarely on you, the shipper. It’s not enough to show that your package was damaged or lost in transit; you must also provide evidence that the incident was directly FedEx’s fault. This can be incredibly difficult to prove. If the packaging was deemed insufficient or if the damage could have occurred for reasons outside of the carrier’s handling, your claim will likely be denied. This means you need meticulous documentation and proof that you did everything correctly to even have a chance at recovering the declared value of your items.

The Reality of the Claims Process

While FedEx aims to resolve claims within a week, the reality for high-volume shippers can be much more complex. To start a claim, you can file online, via email, or by fax, but you must retain all original packaging materials, as FedEx may need to inspect them. This is where many claims hit a snag. The carrier might dispute the item’s value, argue that the packaging was inadequate, or even suggest a repair instead of a full replacement. Because you have to prove carrier fault, many claims are ultimately denied, leaving you to absorb the loss. This is why many businesses rely on third-party insurance or use an invoice audit and recovery service to manage these complex interactions and ensure they recover the maximum amount possible.

Understanding FedEx Declared Value

Purchasing insurance requires you to tell the carrier the value of the shipped items. Upfront proof or receipts are not required at this stage; however, if you make a claim, these will be required to confirm the value of the package. The first $100 of insurance is free for most services; however, you can purchase insurance for more than this value (more on this shortly). Adding more insurance to a package can be accomplished online or in person. Also note that with FedEx insurance, the carrier will not automatically replace the item if it’s broken and can be repaired. Additionally, FedEx has a maximum declared value, which varies based on the service you select. See the 2024 Declared Value Table below.

How Much Does FedEx Insurance Cost?

The cost of insurance varies based on the type of service that you select and the items you plan to ship. Here are a few samples of what to expect regarding insurance coverage and value coverage:

FedEx SameDay & SameDay City: Maximum declared value is $2,000, and the additional cost for declared value is $3 for shipments up to $300. $1.25 per $100 is charged for declared values over $300.
U.S. Express package service, U.S. Ground service, and International Ground services. The additional cost is $3.90 for shipments valued up to $300. After this amount, it’s $1 per $100 of declared value over $300.
U.S Express Freight Services: The additional cost is $1.40 for shipments valued up to $100 of declared value or $1.00 per lb, whichever is greater.

Direct Signature Confirmation service is required, but comes at no additional insurance cost, if you state the value is in excess of $500. As a result, FedEx will require a signature from the package recipient when delivering the package. If nobody is available to receive the package, the carrier will attempt delivery again. Shippers sending multiple items should also carefully consider whether shipping multiple items together makes sense, as insurance covers the entire package, regardless of the value of each item shipped. For example, let’s say that you plan to use FedEx SameDay City, which has a maximum declared value of $2,000. You are shipping two items, each worth $1,500. In this case, it might make sense to ship the items separately to ensure you achieve full coverage.

FedEx Declared Value Costs for 2025

As you plan your shipping budget, it’s helpful to understand how declared value costs are structured. While official 2025 rates are subject to FedEx’s annual announcements, the current pricing provides a clear picture of what to expect. The cost varies by service. For FedEx SameDay or SameDay City, the fee is $3 for shipments valued up to $300, then $1.25 for every additional $100. For common services like U.S. Express, U.S. Ground, and International Ground, the fee is $3.90 for the first $300, then $1 for each subsequent $100. U.S. Express Freight is different, costing $1.40 per $100 of declared value.

Remember that if you declare a value over $500, FedEx requires a Direct Signature Confirmation upon delivery, which adds security for your high-value items. It’s also smart to think strategically when shipping multiple products in one box, as the declared value covers the entire package, not individual items. Keeping an eye on these accessorial charges is crucial for managing your bottom line. A detailed invoice audit can help identify and reclaim funds from these and other complex carrier fees, ensuring you’re not overpaying for your shipments.

Understanding Insurance Limitations

When using any carrier, including FedEx, it’s a good idea to verify which items are not covered or have limitations on coverage. For example, the Declared Value and Limits of Liability sections of the FedEx Service Guide explain that FedEx shipment items of extraordinary value and those items with a value that is difficult to ascertain may not be declared. According to the FedEx site, limitations include the following: For Shipments containing the following items of extraordinary value the Declared Value for Carriage is also limited and depends on the contents and destination of the Shipment:

Artwork, including any work created or developed by the application of skill, taste or creative talent for sale, display or collection. This includes without limitation, items such as paintings, drawings, vases, tapestries, limited-edition prints, fine art, statues, sculptures, collector’s items, customized or personalized musical instruments, or similar items.
Antiques or collectible items, or any commodity that exhibits the style or fashion of a past era and whose history, age or rarity contributes to its value. These items include but are not limited to, furniture, tableware, porcelains, ceramics and glassware. Collectible items may be contemporaneous or related to a past era.
Film, photographic images, including photographic negatives, photographic chromes and photographic slides.
Any commodity that by its inherent nature is particularly susceptible to damage, or the market value of which is particularly variable or difficult to ascertain.
Jewelry, including but not limited to, costume jewelry, watches and their parts, mount gems or stones (precious or semiprecious, cut or uncut), industrial diamonds and jewelry made of precious metal.
Precious metals, including but not limited to, gold, and silver, silver bullion or dust, precipitates or platinum (except as an integral part of electronic machinery).
Furs, including, but not limited to, fur clothing, fur-trimmed clothing, and fur pelts.

FedEx might not exclude insurance on the above items outright, but may limit the amount you can declare. For example, FedEx permits a maximum declared value of up to $1,000 for the following items:

Artwork, such as paintings, drawings and sculptures
Photos and film
Glassware
Jewelry
Furs
Precious metals, such as gold, silver and platinum
Plasma screens
Antiques
Stocks, bonds, and cash equivalents such as stamps, traveler’s checks and money orders,
Collectibles, such as coins or memorabilia
Some musical instruments
Models, such as dollhouses

If you state a value that exceeds the amount allowed, you simply won’t be able to recover more than what is set forth in the FedEx rules and regulations.### Maximum Value for Envelopes and Paks

If you frequently use FedEx Envelope or FedEx Pak for shipping documents or small items, it’s crucial to be aware of their specific value limits. FedEx caps the maximum declared value for these packaging types at $500. This means that even if the item inside is worth thousands, the most you could ever recover in a claim is $500. It’s a firm rule with no exceptions. For this reason, you should never ship items valued at more than $500 in a FedEx Envelope or Pak. To properly protect your high-value shipments, you’ll need to select a different packaging option and service that allows for a higher declared value, ensuring your business is covered in a worst-case scenario.

International Shipment Rules

Shipping internationally introduces another layer of complexity to the declared value process. FedEx has strict rules, and one of the most important is that the declared value for carriage cannot exceed the declared value for customs. This alignment is non-negotiable and helps prevent customs fraud. Furthermore, FedEx will not be liable for damage if it’s determined that the item was poorly packaged. International transit involves more handling and potential for turbulence, so robust packaging is essential. Failing to adhere to these rules can result in a denied claim, leaving you to absorb the full cost of the lost or damaged item, which can be a significant blow for any business trying to reduce distribution and fulfillment costs.

No Reimbursement for Prohibited Items

It might seem obvious, but it’s a point that can’t be overstated: FedEx will not honor a claim for any item on its prohibited list. This holds true even if you successfully declare a value and pay the associated fees for coverage. If an item is forbidden, any insurance you purchase on it is void from the start. Before shipping anything, especially items you’re unsure about, it’s essential to review the official FedEx list of prohibited and restricted items. Taking a few minutes to verify your shipment’s contents can save you from losing both the value of your goods and the money you spent on shipping and insurance fees.

How to Insure Your FedEx Package

Taking advantage of FedEx insurance is easy. When you drop off the package to be packed and shipped, simply fill out the value section of the shipping form. If the package includes items worth less than $100, don’t worry about purchasing additional insurance; coverage is already provided. Additionally, you can pack your own item and have it picked up at your location, which is ideal for businesses shipping large numbers of packages. Ensure that you follow FedEx packing requirements, which is important if you file a damage claim. Packages that exceed $100 in value require a declared value. All you need to do is state the value, knowing that you’ll need to have documentation if a claim is required.

How Payouts Are Calculated

So, you’ve declared a value and paid the fee. If something goes wrong, you get that full amount back, right? Not exactly. The way FedEx calculates payouts can be surprising if you’re not familiar with the fine print in your carrier agreement. It’s crucial to understand these details to accurately assess your financial risk and ensure you’re not left with unexpected losses. Let’s look at the key factors that determine what you’ll actually receive in a claim, because knowing this is a fundamental part of managing your shipping spend and protecting your business from unnecessary costs.

Payouts Aren’t Guaranteed at Full Value

Here’s the most important thing to remember: FedEx’s payout is not guaranteed to match your declared value. Even when the carrier is at fault, they will pay you the lowest of three possible amounts: the cost to repair the damaged item, the item’s depreciated value, or the cost to replace it. This is a critical distinction that can have a major financial impact. If you’re shipping equipment that has aged, its depreciated value could be significantly lower than its replacement cost. This policy protects FedEx, not necessarily your bottom line, making it essential to understand that declared value is a limit on liability, not a true insurance policy that guarantees replacement value.

Liability Limit Without Declared Value

If you choose not to declare a value for your shipment, you aren’t left completely empty-handed, but the protection is minimal. For most FedEx services, the carrier’s maximum liability is automatically limited to $100. This standard coverage is included at no extra cost, but it’s a one-size-fits-all amount that rarely covers the full value of commercial shipments. Relying on this default limit for anything beyond low-value goods is a significant financial risk. It underscores the importance of evaluating each shipment’s worth and deciding if paying for a higher declared value is a necessary part of your shipping strategy to avoid absorbing preventable losses.

The Risk of Value Averaging for Multi-Box Shipments

High-volume shippers often send multiple boxes under a single master tracking number, and this is where a major pitfall exists. If you assign a total declared value to the entire shipment instead of declaring a value for each individual box, FedEx will average the value across all packages. Imagine shipping a $5,000 piece of equipment in one box and $100 worth of accessories in four other boxes, with a total declared value of $5,400. If the box with the expensive equipment is lost, you won’t get $5,000 back. Instead, FedEx will pay the averaged value of $1,080 ($5,400 divided by 5 boxes). This can lead to a massive, unexpected loss, which is why a robust system for reporting and KPIs is vital to catch these details.

Lost Profits Are Not Covered

Another critical limitation to understand is that FedEx’s declared value only covers the tangible item being shipped. It does not cover any consequential losses your business might suffer due to the shipping mishap. This means if a package is lost or delayed, you cannot claim reimbursement for lost sales, production downtime, or damage to your customer relationships. The carrier’s liability is strictly limited to the item itself. This is a key reason why many businesses opt for third-party shipping insurance, which can be tailored to cover these types of business-related losses. It’s also why a thorough invoice audit and recovery process is so important to recover every possible dollar.

Packing Details and Considerations

FedEx has guidelines about packing items, and if you file an insurance claim, these guidelines become important. In the case of damage, FedEx wants to make sure that the package was packed properly so they can determine who was at fault for the damage. If the package was not packed according to their guidelines, they may deny the claim. The carrier makes a few suggestions for packaging, including the following:

You may use your own packaging if the boxes are sturdy and undamaged with all flaps intact.
Chipboard boxes, including gift or shoe boxes, must be packed into a corrugated outer box.
If items are heavy, use double-wall boxes.
Place small packages inside a larger outer box.
All fragile items should be double-boxed with 3 inches of cushioning in and around the smaller box.
Wrap items individually with cushioning material and center them in boxes away from other items and not near the sides, corners, top or bottom of the box.
Bottles that contain liquids should be upright. The inner packaging should be able to contain any potential leaks.

Full guidelines can be reviewed here, which include guidelines for unique items, such as those with insurance limitations, including artwork, photos, and musical instruments.

Understanding the FedEx Claims Process

Purchasing insurance is a safeguard that most hope they won’t need. But if a customer’s package goes missing or arrives with damage, you’ll need to cash in on that insurance you purchased. But how? FedEx provides a few different methods for filing a claim, including online or by email or fax to the FedEx claims department. Filing a claim online allows you to get updates on your claim easily via email. Fax or mail must be used when filing an international claim. After submitting your claim, contact FedEx customer service to get a case number so you can reference it if you need to check on the claim in the future. If you’re making a claim for damage, ensure that all packing materials, including the box and packing contents, are kept handy as FedEx might ask to inspect the items. Additionally, keep your eye on the calendar. FedEx Express requires that damaged or lost package claims be made within 60 days after the shipment is sent. For international packages, claims must be made within 21 days. FedEx Ground claims have a nine-month window from the delivery date; however, if the item is lost or missing, it must be reportedwithin 60 days. If you make the claim outside the designated time frame, FedEx won’t investigate the claim. After a claim is made, FedEx claim resolution is fairly quick and usually completed within a week. Once a claim is approved, reimbursement for the declared value is sent.

Important Claim Deadlines to Know

When you’re managing dozens or hundreds of shipments, keeping track of deadlines is critical. If a package is lost or damaged, you have a limited window to act. For FedEx Express, you must file claims for damaged or lost domestic packages within 60 days of the shipment date. That window shrinks to just 21 days for international packages. FedEx Ground offers a more generous nine-month period for damage claims, but if a package is lost, you still need to report it within 60 days. Missing these deadlines means you forfeit your chance to recover any costs, so it’s essential to have a system in place to track and file claims promptly. This is a key part of managing your overall shipping spend and protecting your bottom line.

Third-Party Shipping Insurance: A Better Alternative?

Let’s clear up a common and costly misconception: FedEx’s “declared value” is not the same as shipping insurance. It’s simply the maximum liability that FedEx will accept if your shipment is lost or damaged *and* they are found to be at fault. FedEx is very clear that they do not provide insurance coverage. This distinction is crucial because the burden of proof falls on you, the shipper, to demonstrate that the carrier was responsible for the damage. This can lead to a complicated and often frustrating claims process where payouts are not guaranteed, even if you’ve paid for a higher declared value.

This is why many high-volume shippers turn to third-party insurance. A separate insurance policy from a third-party provider offers true coverage for your goods in transit. These policies often have broader terms, fewer exclusions for high-value or fragile items, and a much more straightforward claims process designed to reimburse you, not protect the carrier. For businesses shipping valuable products, relying solely on a carrier’s limited liability is a significant financial risk. A dedicated insurance policy provides peace of mind and a more reliable safety net, allowing you to focus on your customers instead of fighting a denied claim. It’s a strategic part of any robust carrier diversification plan.

A Note on Other Carriers

It’s tempting to think this is just a FedEx issue, but these liability limitations are standard practice across the shipping industry. Carriers like UPS and DHL operate with similar policies. Their primary business is logistics and transportation, not insurance, so their rules are structured to limit their own financial exposure given the millions of packages they handle daily. They simply can’t assume unlimited liability for every item, from paper documents to priceless antiques, that enters their network. This is why they all offer a minimal, default liability coverage and cap the declared value you can purchase.

The key takeaway for any business is that you cannot rely on the carrier to fully protect the value of your shipments. Whether you use FedEx, UPS, or a mix of providers, you need a proactive risk management strategy. This means understanding the limitations of declared value, properly packing your goods to prevent damage, and securing third-party insurance for any shipments you can’t afford to lose. Viewing this as an industry-wide standard helps you make smarter decisions and build a more resilient shipping operation, which is a core component of effective spend management.

Shipping with Greater Confidence

Most companies ship a large number of packages each year, and the majority of those packages will arrive on time and without damage. But in a small number of cases, something goes wrong during the shipping process — a package gets damaged or appears to simply vanish, leaving the customer unhappy and looking for resolution. Taking care of the customer is the first goal, but afterward, a company needs to recover its financial loss. FedEx insurance is one tool that can help minimize these losses. Understanding what this type of insurance coverage offers and developing internal policies for handling these situations will create smoother experiences and minimize potential loss.

About Shipware

Shipware delivers volume parcel and less-than-truckload shippers with intelligent and innovative distribution solutions and strategies. Whether you ship with FedEx, UPS, USPS or regional carriers, our contract negotiation and invoice audit services are guaranteed to reduce your parcel and LTL shipping costs by 10 to 30 percent, with no disruption to current operations. Our team of experts has over 200 combined years of carrier pricing experience. We have negotiated thousands of FedEx, UPS and LTL contracts – saving our clients an average of 19 percent of their annual shipping spend.

Frequently Asked Questions

If I pay for a higher declared value, am I fully covered if my package is lost or damaged? Not exactly. Paying for a higher declared value only increases the carrier’s maximum liability—it doesn’t guarantee you’ll receive that full amount. If your claim is approved, FedEx will pay the lowest of three amounts: the cost to repair the item, its depreciated value, or the replacement cost. This means if you ship an older piece of equipment, you might only get back its much lower depreciated value, not the full cost to replace it.

Why is it so difficult to get a claim approved by FedEx? The main reason claims are challenging is that the burden of proof is entirely on you, the shipper. You have to provide clear evidence that the loss or damage was directly FedEx’s fault. If there’s any question about whether your packaging was sufficient or if the damage could have happened for another reason, the carrier will likely deny the claim, leaving you to absorb the cost.

What is the single most expensive mistake shippers make with declared value? One of the costliest and most common errors happens with multi-box shipments sent under one master tracking number. If you declare a total value for the entire shipment, FedEx averages that value across all the boxes. So, if you ship a $5,000 item in one box and four other boxes of accessories, and only the expensive box is lost, you won’t get $5,000 back. You’ll only receive the averaged value per box, resulting in a significant financial loss.

Is it even worth paying for declared value on items like jewelry or antiques? You need to be very careful here. FedEx has strict limits on what it will cover for items it considers to be of “extraordinary value,” like artwork, jewelry, or antiques. For many of these categories, the maximum declared value is capped at $1,000, regardless of the item’s actual worth. Shipping something more valuable than the cap means you are accepting the risk for any amount over that limit.

Is this just a FedEx issue, or do other carriers like UPS have similar policies? This is an industry-wide standard, not something unique to FedEx. Carriers like UPS and DHL have similar policies that limit their liability. Their core business is logistics, not insurance, so their rules are designed to minimize their own financial risk. No matter which carrier you use, you cannot rely on their declared value option to fully protect your goods.

Key Takeaways

Understand That Declared Value Isn’t Insurance: FedEx’s declared value simply limits their maximum financial liability and requires you to prove they were at fault for any loss or damage. It is not a comprehensive insurance policy that guarantees reimbursement.
Know How Payouts Are Calculated: If your claim is approved, FedEx will only pay the lowest of three options: the item’s repair cost, its depreciated value, or the replacement cost. This means you may receive far less than what you believe the item is worth.
Consider Third-Party Insurance for Real Coverage: For high-value shipments, a separate, third-party insurance policy offers a more reliable way to protect your assets. These policies typically have a simpler claims process and provide broader coverage than a carrier’s limited liability.

FedEx Insurance vs. Declared Value: What to Know