Is parcel insurance worth it?
It’s Christmas, and the little elves in parcel company mail rooms will be working overtime to deliver our presents.
Accidents can happen. Gifts can get delivered late, broken or simply not at all.
First, double check your contents insurance to know what you’re covered for.
Before you’ve even ordered the present, companies will try and flog you extra delivery cover.
But is it worth it?
Here’s what we think.
When you’re sending something expensive by post, insurance seems like a no-brainer.
The cost of the insurance pales into insignificance compared to the price of the item in the parcel.
But many parcel insurance products are all but worthless: riddled with get-out clauses that let companies refuse to pay out, excesses that swallow what protection you do get, and what’s worst of all is that often insurance policies offer less than your basic consumer rights anyway.
When you send a parcel by private carrier, you’ll often be asked if you want insurance. And private carriers get the majority of the parcel trade.
The process, selling you something that goes along with what you already bought, is called cross-selling, and it’s a staple of marketing everywhere.
Nothing wrong with that. But parcel insurance often doesn’t really protect you.
For instance, myHermes, one of the biggest parcel carriers around, offers insurance for up to £250 worth of contents for £5.80: turn it down and you’re covered for only £25, so most people sign up.
CollectPlus charges a sliding scale, beginning with a £1 fee to have a parcel signed for, £3 to insure deliveries worth £50 to £150 and £5 for deliveries between £150 and £300.
These are very low fees, so most people midway through a phone or online purchase will go for it. That nets companies millions in fees, but again, the cover provided is often very poor.
If myHermes customers read the small print, it turns out that more than 40 categories of items are exempt, including:
* electrical goods
* anything made of glass
* ceramics or metals
* ‘ceramic or composite items of any description, including without limitation glass, mirrored items, crystal, ceramics, porcelain, plaster, marble, china, stone, slate, resin, granite, concrete (or any item containing these materials).’
That doesn’t leave a lot covered.
And if you take out their insurance, you could be worse off than if you refuse.
In fact, many consumers are putting redress further out of reach by taking out these restrictive insurance policies.
myHermes will cover you up to £250 if you buy their insurance.
But if you don’t, they’ll pay whichever is the lower: £25, or the cost of replacing or repairing your item.
They have to: that’s the law. A parcel delivery company has a legal duty to deliver your product safely and they should compensate you for any loss.
The only exception is if you ordered the product from a shop and they hired the delivery company: then, the shop or website is responsible for the item until it’s delivered, according to the Consumer Rights Act 2015.
At special occasions like a birthday or Christmas, this is a particularly pressing issue, because most people send out far more mail than usual and it’s likely to be more valuable than usual.
When someone’s present is in the box, insurance becomes more tempting than ever: we want added assurance that the item will show up, on time, and in one piece.
But consumers shouldn’t let themselves be preyed on: use these steps to make sure that you don’t wind up paying for worse cover than the law already provides!
Delivery insurance, is it worth it? Our checklist
1: Check the terms and conditions. Make sure you’re not sending anything that the business refuses to carry. Normally fireworks, weapons, sharp objects, flammable things and human or animal remains are all ‘excluded’ or ‘prohibited’ items.
2: Check the terms of the cover you’re being offered against A Spokesman Said’s guide to your delivery rights.
These are what you’re already guaranteed by law: if the insurance doesn’t offer you anything better, or it ties you into fees and excesses that actually make you less protected, don’t bother.
3: Make sure you’ve packed and labelled the parcel correctly. It’s easy to get it wrong, so double check.
And if you have trouble with your delivery, remember you can always use A Spokesman Said to publicize your complaint and push the company to do the right thing.
We’re in your corner.
Oh, and merry Christmas!