Why should parcel insurance exist?

wesleyad

I agree with the OP. We have actually had this discussion on here a few times. I think it is a consumer right issue. The logistics companies basically try to absolve themselves of carrying out their contract (delivering your goods correctly) by adding in this insurance.

I think the consensus we came to under consumer rights, is that the company must still have a duty of care to carry out their contract. So for example if they have insurance on a mirror and it smashes, that's fine as it's a delicate object. But if they lose the mirror, then the insurance is moot, they have simply not fulfilled their contract. Whether this has been tested yet in court I don't know.

Other examples of insurance are not comparable. More comparable would be having to take out insurance when you take your car for an MOT in case the mechanic damaged it. Clearly people would say "but it's your job to not damage it", yet for some reason courier companies get a freebie.

And finally it also becomes a bit more nefarious (and I'm not claiming this happens), when it effectively means that if you don't take out insurance, the company can just steal your goods, claim they are lost and say oh well better take insurance next time.

the_lunatic_is_in_my_head

To sell insurance you need permission from the FCA, as far as I know the couriers offer "parcel cover" or "compensation".

In my view it should be called what it is "insurance" and regulated, the couriers would soon start to perform better and whilst there may be an overall cost increase there is plenty of competition to help maintain competitive prices.

OP regarding your parcels, send Parcel2Go a letter before action for the value of the service and the goods, they'll likely pay but might try to prevent you booking any more parcels with them.

DoaM

the_lunatic_is_in_my_head wrote: »

but might try to prevent you booking any more parcels with them.

... which may ultimately be in the OP's best interests.

Jelli

Thank you wesleyad and Lunatic for your thoughts. P2G has a webchat function that I might try first to gently prod them.

davidmcn

Calling it "insurance" is perhaps unhelpful - they are after all accepting the liability to pay compensation, but only if you tell them how much the item is worth and pay the appropriate fee.

It's not really different from other things e.g. you'll pay more for a solicitor to buy you a £1m house than a £100k house, not just because they think they can screw you for more money, but because they're taking on more responsibility. Yes, they shouldn't be negligent and causing you a loss, but the cost of their PI insurance etc has to come from somewhere.

So if a courier is being asked to transport something which is more valuable/fragile, it makes sense for them to charge more for it.

wesleyad

davidmcn wrote: »

So if a courier is being asked to transport something which is more valuable/fragile, it makes sense for them to charge more for it.

That's fair enough but that should just be built into the pricing.

And one problem that comes up a lot is in fact pretty much anything is exempt in their ts&cs. For example hermes insurance wont cover:

https://www.myhermes.co.uk/help/carry-guide.html#full-list-excluded

a list far too big to paste here. Makes you wonder what actually is covered. And if they lose the package they still just say it's not covered which is nonsense, the fact the box contained a laptop rather than a tray of spoons doesn't affect their ability to deliver it.

There's only one other situation where the party selling the insurance is the same party who is being insured against (ie the ones who will cause the loss or damage) and that's protection rackets

Mishomeister

I am 100% with OP on this.


If you hire an electrician to put up a lamp and he drops and breaks it due to his own fault, is it his fault, or should've you insured it?


If you hire a removal company, and their truck gets in to an accident and your flat screen 50 inch TV gets smashed, is it them who have to compensate you or is it you who had to buy the insurance?


Or you pay a bank cheque in to your bank branch and instead of it being sent to the processing centre overnight, it gets lost. Should've you had to insure the cheque?


I have sold an item on eBay the other day for over £50 and the company similar to the OPs one wanted to charge me more for the insurance than the delivery, it would be circa 10% of the item value so of course I refused.


If I pay some one to get the goods I have entrusted them to take from point A to point B and the goods never arrive, I would treat them as being stolen and would be willing to test it in court.


There is a huge 'Suck it up, it's your own fault' brigade' on this forum which goes aggressively on people trying to fight for their rights. They then laugh of people who do want to fight big companies


Through my life I have made several thousand pounds by not listening to their advice.

Nilrem

Ok, do away with the insurance.

Instead you get the courier asking you the weight of the item and it's value before every collection before they'll even give you a cost, rather than publishing the basic cost using the weight as the starting point.

At the moment they do the basic delivery based on the weight as it's primary factor, now if you start to require them to cover the full value of everything then you're going to see the average cost per delivery for the weight to go up considerably - a 500g package containing current mass market books might only be worth a fiver, but a 500g package containing artwork, diamonds, jewellery or gold might be worth anything up to millions, or even a 500g book might be worth hundreds of thousands if it's rare.

Hence the added compensation levels because the chances of losing a 500g package 20x10x2cm in plain packaging is the same regardless of if it's contents are worth pennies, or millions (and by losing we're including damage due to things like fire, sorting machines.flood, the van being hijacked by crazed wallabies)

The car insurance analogy I see people using is a bad one, as the the insurer is already taking into account the value of the vehicle, the risks of the driver, the potential costs of the passengers needing life long medical assistance etc in the quote, you're effectively getting a quote for the "maximum value of the package" as all of them are taken into account in the one thing, whilst an courier has zero idea of what the package is worth but works their pricing initially by weight with a basic value.
If you're going to go with the car insurance analogy consider the "weight of the package" as being equivalent to the basic risks of the primary driver and car, whilst the "value of the package" is equivalent to the cost of adding an additional driver, taking it abroad, using it for business purposes or for racing on a track where the risks are different.

I mean yeah the couriers could assume every package they carry is worth an average of £5k per kilo and price their service accordingly, but I suspect most people would shy away from paying £30 a kilo for normal deliveries (Special delivery for example is ~£25 for 1kg at 2.5k value and at it's basic rate is about £9 for a kilo with £500 compensation included, oddly enough people don't use it when Hermes is a third of the price...).

Hence the reason you get the basic delivery cost, then the added cost if it's worth more, as it's the most sensible and reasonable way to do it without upping the price massively for everyone.

Unfortunately people tend to look at nothing but the cost per kilo for deliveries, and don't question the difference between say Hermes and Special delivery or UPS, then complain that the compensation for lost packages is worse with the cheaper service (which is also usually slower and with worst customer service when things go wrong).

Andy_L

ScotinWales said:

Has anyone insured their parcel with a company like secursus who specialise in parcel insurance? It is much cheaper than insuring with the courier.

I haven't. But perhaps you could tell me more about them...

Were_Doomed

It seems you managed to quote the post before it got nuked as spam.