Understanding UPS Declared Value vs. Traditional Insurance: A Comprehensive Guide for Shippers

Last Updated on 08/09/2023 by UPS_ Admin

Navigating the complexities of shipping can be daunting, especially when understanding costs and liabilities associated with lost or damaged packages. In this detailed guide, we break down UPS’s declared value system, highlighting the differences between it and traditional insurance. Learn about the costs, benefits, and why the distinction matters for shippers and recipients alike.

UPS declared Value Insurance

What does UPS declared value cost?

UPS offers a tiered system for declared value costs based on the value of the package. This determines the potential liability UPS would have in the event of loss or damage to the package.

Declared Value Costs:

  • $0 – $100: No charge. UPS provides maximum liability coverage for shipments up to $100 in value. This coverage, known as “Declared Value”, means that items worth $100 or less can be claimed for up to that amount if they are lost, stolen, or damaged during transit.
  • $100.01 – $300: $3.45. If the declared value of the package is between $100.01 and $300, UPS charges a fee of $3.45.
  • Over $300: For every additional $100 in declared value above $300, there is a charge of $1.15.

Notes about UPS Declared Value Coverage:

  1. For multi-box shipments, the declared value is applied to each box in the shipment. For instance, if the declared value specified is $150 and the shipment consists of three boxes, each box is declared at $150 (amounting to a total of $450 for the entire order).
  2. The UPS Declared Value covers only the value of the item. It doesn’t account for packing materials or shipping costs. An exception is made if the item was packaged and shipped at a UPS Store. In such cases, any loss or damage incurred can result in a claim for the full declared value of the shipment and materials, as stated at the time of the transaction.

Should you consider UPS insurance? It’s advisable to use UPS insurance when shipping items that hold significant value or importance. If your item’s value exceeds $100, UPS insurance should be seriously considered. Though it may come with an added cost, the assurance it provides in protecting your valuable items is often worth the expense.

Furthermore, both UPS and FedEx offer insurance on the first $100 of declared value at no additional charge. This means that if the declared value is up to $100, insurance is provided for free. However, declaring a value exceeding $100, even by just a cent, will result in charges. The minimum charge for such declarations is $3.15 for both FedEx and UPS.

What is the maximum declared value for UPS?

UPS offers various maximum declared values based on the method of shipping and other specifics:

  1. UPS Next Day AirĀ® packages: The maximum declared value is up to $70,000. Source
  2. General Packages: If you’re using a UPS account or shipping from a UPS Store, the maximum declared value is $50,000.
  3. UPS Internet Shipping: If you use a payment card as the payment method, the maximum declared value is set at $5,000.
  4. UPS Print Return Label, UPS Print and Mail Return Label, Electronic Return Label, or 1 UPS Pickup Attempt, Return Services, and UPS Returns on the Web: The maximum is $1,000.
  5. Third-party Retailers: The limit is $1,000 for packages shipped through them.
  6. UPS Drop Box: The maximum declared value is set at $500.
  7. International Shipments containing jewelry: They have a cap of $500 for declared value.
  8. Shipper Release: For these, the maximum declared value stands at $999.
  9. UPS Prepaid Letters: Shippers cannot declare a value for these.

Please note, while UPS’s default liability coverage for shipments (termed “Declared Value”) is up to $100, this isn’t an insurance. In fact, page 171 of the UPS Tariff/Terms and Conditions of Service specifies that UPS does not provide insurance on any item with a declared value over $100. Thus, for items with a declared value over $100, insurance should be sought from external providers.

Costs Associated with UPS Declared Value:

  • The first $100 of your UPS declared value is free of charge.
  • For values beyond that, there’s an additional charge of $1.05 for every $100 of value.
  • There’s a minimum charge of $3.15 for any UPS declared value fee.

Why UPS Declared Value Matters: It’s crucial to understand the distinction between “declared value” and insurance. Declared value raises UPS’s liability limit in case of package damage or loss, while insurance provides comprehensive protection against potential loss or damage. Always ensure your packages receive an origin scan. Without it, if the package gets lost before the scan, UPS might not provide compensation.

Moreover, there are circumstances where UPS might not be responsible for loss or damage, such as:

  • Improper packaging.
  • Perishable commodities.
  • Checks, data stored on any media.
  • Acts of God or adverse weather conditions.
  • Packages without a scan.

Is UPS declared value the same as insurance?

No, UPS declared value is not the same as traditional insurance. While they may seem similar, there are distinct differences between the two.

UPS’s declared value system increases the carrier’s maximum liability on a package in case of loss or damage. This means that if a package with a declared value is lost or damaged, UPS will be liable for up to the declared value amount, but not beyond it. The declared value coverage essentially sets a cap on how much UPS will reimburse the shipper in case of a mishap. For instance, if a package has a declared value of $500 and it gets lost, UPS would be liable for up to $500.

On the other hand, traditional insurance would provide coverage based on the insurance policy’s terms and might consider various factors like depreciation, replacement value, etc.

Furthermore, UPS has made it clear in their terms that the declared value is not insurance. This means that if a shipper needs insurance coverage beyond the declared value, they would have to get it from an external insurance provider.

For standard shipments, UPS automatically provides declared value coverage of up to $100. If the value of your item exceeds this amount and you wish to declare a higher value, you can do so for an additional fee. It’s crucial to understand that this does not equate to purchasing insurance for the package but merely raises the carrier’s liability.


In sum, while UPS’s declared value system offers a way to raise the carrier’s liability for potential loss or damage, it is not synonymous with insurance. Shippers must weigh the value of their items against potential costs and risks, ensuring they have adequate coverage, whether through UPS or external insurance providers. Proper understanding and diligence safeguard your shipments.

Posted in UPS

Leave a Reply

Your email address will not be published. Required fields are marked *