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What does it cover?
Insurance purchased through the USPS for priority mail packages provides the peace of mind that if anything happens to your package, the USPS will financially compensate you. Insurance covers packages that might be lost, stolen, damaged and opened with missing contents.
The amount of insurance coverage you can purchase on your package depends on the location you choose to purchase the insurance. If you choose to print your mailing labels at home and purchase insurance online, you can purchase up to $5,000 of coverage if your package is damaged or lost. Insurance purchased through self-service kiosks, such as those located in the lobby of your post office, only allow you to purchase up to $500 of coverage. Insurance purchased at the counter inside the post office is also eligible for up to $5,000 coverage.
The price of insurance on your Priority Mail package depends on the value of the item on the day that you mail it. Postage rates for insurance are
broken down incrementally ranging from a value of $0.01 to $5,000. As of June 2011, the cost to add insurance to a priority mail package is anywhere from $1.80 to over $4.75 depending on the value of your item.
Filing a Claim
If your shipment is lost, you will need to file a claim to receive reimbursement. Claims can be filed in your local post office or online. When filing a claim, you need to provide the USPS with the insurance article number, which is the number that appears on the insurance slip you received when you purchased the insurance. This is the same as the transaction number if you printed your labels at home, or the auction number if it was an item sold on eBay. You will also be required to provide a description of the item and proof that it didn't arrive to you. Since delivery confirmation is included with an insurance purchase, the USPS has a way of tracking your item and verifying that it did not arrive at your address.