What Is a Declared Value?
Declared value is the worth of the contents of a shipment that is disclosed by the shipper, owner, or authorized agent. Carriers may set baseline declared value limits which constrain their liability unless customers explicitly declare a higher value. If shipments are lost, stolen, or damaged, the shipper’s compensation obligations are based on the value. It can also play a role in tariffs and other customs fees, as well as shipping insurance. In some cases, nations may refuse entry to packages over a certain value without prior arrangement.
Customers can base the declared value of the contents of a shipment on the market price, which is how much the items are expected to cost. For insurance purposes, they may also consider the costs associated with replacement, including the cost of delays when products do not arrive on time. With some items this process may be simple, as the item may be something bought and sold on the open market that can be easily replaced. Works of art and other unique items may require a special valuation.
The shipper will only accept liability for the declared value of a package. If the owner or sender does not declare a value, it uses default liability limits. In the event of loss, theft, and other problems, customers can only receive compensation up to these limits. For packages of higher value, a declaration is required, and people may need to pay extra for insurance and special handling. Refusing to declare value can save money on these expenses, but will make replacement difficult if something happens.
Values can be written on the packaging of the shipment to make that information available to handlers. Insured packages may carry special insignia to alert carriers and handlers, who may need to scan packages in transit to create a tracking record. Such packages are handled with special care to reduce the risk of liability and ensure that in the event of a problem, the path of the shipment can be traced. A company may find, for example, that a package disappeared between two sorting centers, which helps them pinpoint the possible location and determine what happened.
Domestically, declared value does not typically create problems with shipping. Internationally, however, it can be an issue. Packages over a certain value may be handled differently at customs. Recipients may be charged a higher fee, and in some cases the package may be refused entry. It is often wise to check on policies before filling out a declared value, to reduce the risk that a package will be snarled in transit.
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