Insurance and YOUR Coverage?

[GirlpowerKnits]

Hey!

I have a question about using insurance.

Ok, worst-case (imagined) scenario:
I spend 6 weeks knitting a $250 custom sweater, ship it, and it gets damaged/lost.
Do I get covered, as well as the buyer? (will it cover some of my time/expense, and a full buyer refund?)

If I had insured it, how do I get refunded? Does the refund come to me and I refund the buyer, or does the refund automatically come to them from paypal?

Do you insure for the actual price of the item, or double? Because if the item gets lost, I don't want to lose all my time/ $ spent. Does this make sense?

I've never had to go through this before, and my items are not quick re-send items. I would have to give a refund in most cases vs. sending a new item.

[Former_Member]

The cost you charge for the item should already include your time/$ spent to make it. From what I understand you can only insure for the cost of the item. You are the one who files the claim and then you would refund the customer. I insure everything over $20 in ship when I ship.

[GirlpowerKnits]

It is in the cost of the item. But if it gets lost and I have to refund the buyer, I am losing it in the refund.
Example:

I sell a $40 doll, it gets lost. I refund the buyer $46. I've just lost the cost of supplies and $6 shipping.

[Former_Member]

Ok, I see what your saying. Hadn't thought of it that way. Now you have me scratching my head. :)

[GirlpowerKnits]

I have been trying to figure out a solution for weeks!
I know this isn't a problem for shops who can make "quick" things that can be replaced easily. (cards, jewelry, etc.)
I make items that have a lot of make-time in them....

Does anyone have any experience with this, we'll all benefit!

[Former_Member]

There isn't a solution. You won't be compensated by the delivery company for your time, that's not their problem. You could always offer to make another one because you technically aren't losing any money. You get to keep the money already paid to you and then the delivery company should also refund YOU the full amount and you refund the customer so it shouldn't cost you anything

[ComfortAndGrins]

Alicia that is right. If the sweater was $150 then you have that money in hand. The transfer company then gives you another $150 and you either refund it or make another sweater.

[GirlpowerKnits]

But of the $150 I spend $70 on supplies? Then I have to spend another $70 to remake, plus 10 hrs time?

See?

[peppersprouts]

Hey emily - kind of yes....

Susan buys a $100 sweater for you.
You spend $50 on yarn to make the sweater.
You made $50 profit on the sweater.

You mail it to susan and buy insurance for the price she paid for the sweater ($100)

it gets lost (OH NO)
So you file an insurance claim.....THEN

A) Insurance gives you a check for $100, You refund susan $100 she paid for the sweater and say I am so sorry. End of transaction. (no profit made no money lost just time)

B) Insurance gives you a check for $100, You refund susan $100 and she purchases another sweater for you for $100 and you make, ship., and she wears it with pride. (back to your $50 profit yay)

C) kind os the same as B. Insurance gives you a check for $100, (now you haven't lost any money) you make, ship., and she wears it with pride. (back to your $50 profit yay)

[GirlpowerKnits]

Jen, that makes sense. Helps clarify too!

Hope I never have to go through this! (My biggest concern is international)

[Former_Member]

Emily why do you think you're going to lose money? No ones asking you to pay for anything you've already been paid. The money you'll recieve from the insurance is only adding to what you've already been paid. It's like being paid for two sweaters, you didn't make two you made one.

Example - she paid you $150, insurance pays you $150
You only made one sweater for $150 and you refund $150

Where in there are you losing money you're only being asked to cover the costs of anything

[GirlpowerKnits]

@ Alicia,
Because of shipping and time, and fees. (An average project for me is 6+ hours.)

Maybe its silly, but I was having a hard time visualizing. I was going over and over in my head, and wasn't "getting it", which is abnormal for me.
Jens' reply helped tremendously in the visualization!

Thanks to all who have replied in this thread!

[PrairiePrimitives]

You also need to remember that USPS will do everything they can to NOT pay an insurance claim. I last filed a claim with USPS in October 2012. They denied it within 2 weeks, saying the package had been returned to the sender (me). Technically, it had been, but I hadn't received it ... but USPS didn't care about that! I finally DID receive the package back about a month after filing the insurance claim and a couple weeks after putting a trace on the package to see if it ended up at the dead letter office. How they can lose a 20x15 inch box for 2.5 months is beyond me!

[PrairiePrimitives]

There are other insurance companies, of course. Insurance purchased through Etsy Shipping is provided by a 3rd party. They may be easier to work with than USPS.