See whether shipping insurance still beats skipping protection.
Package protection is not the same decision as a Standard
Envelope or Authenticity Guarantee. Envelope is cheap
untracked mail versus a tracked label. Authenticity
Guarantee sends the item through a hub. Here the label is
already tracked; only the extra add-on changes.
The shipment and the add-on
Skip vs insurance vs signature
$—
extra kept by insurance versus skip
Skip after claims
Insurance after claims
Signature after claims
Skip claim leftover
If they keep it, skip
If they keep it, insured
Skip claim rate that still ties insurance
Premium that still ties skip
Monthly gap vs skip (insurance)
Same shipment, three ways to treat a lost box
Path
Extra cost
Claim rate
Payout
If they keep it
Expected after claims
vs skip
The premium, signature fee, payout, and claim rates are inputs — not a carrier table or eBay seller-protection policy. Payout defaults to cost plus postage and pack (replacement value, not retail).
What this checks
Clothing, card, and small-goods sellers search “should I
add shipping insurance on eBay” and “is signature
confirmation worth it” because an item-not-received case
refunds the buyer and the item is gone. A $1.80 premium
looks cheap. It is also charged on every box that arrives.
On the defaults — $40 item, $6 shipping charged, 13.6%
final value fee, $0.40 fixed, $12 cost, $5 outbound, $1 pack,
$5 return label, 10% returns, 2.5% skip claims, $1.80
insurance that pays $18 at a 0.6% leftover-claim rate,
$3.45 signature at 0.4%, forty shipments — skip expects
$17.21, insurance expects $16.20, and signature expects
$14.52. Insurance keeps $1.01 less on this decision and
−$40.24 across forty shipments. Signature keeps $2.69
less (−$107.67 / 40). Skip claims have to reach about
5.3%, or the premium has to stay at about $0.79, before
insurance matches skip. If they keep the item, leftover
is $21.34 skip versus $19.54 insured. A claim on skip
leaves −$18.00 — the sunk cost, because the item does
not come back.
A higher claim rate or a heavier sunk cost flips it. Keep
the same $40 listing and raise skip claims to 8%. Skip
expects $15.22; insurance still expects $16.20 — $0.98
more. A $180 item with $12 shipping charged, $85 cost, a
$12 label, and $2 pack expects $54.02 skip versus $55.31
insured (+$1.29). Skip claims only have to reach about
1.7% before insurance matches, because 2.5% of $99 sunk
is already more than a $1.80 premium. Signature still
trails on that SKU ($53.86) — deterrence without a
payout does not cover a $3.45 add-on on every box.
Insurance pays a typed replacement value when a tracked package is lost. Signature confirmation lowers item-not-received claims but does not reimburse. On the calculator defaults ($40 item, $6 shipping charged, 13.6% final value fee, $12 cost, $5 outbound, $1 pack, 10% returns, 2.5% skip claims, $1.80 insurance that pays $18 at a 0.6% leftover-claim rate, $3.45 signature at 0.4%) skip expects $17.21, insurance expects $16.20, and signature expects $14.52. Insurance keeps $1.01 less after claims. Skip claims have to reach about 5.3%, or the premium has to stay at about $0.79, before insurance matches skip. That is arithmetic on your inputs, not advice to buy a policy.
When does shipping insurance beat skipping protection?
When the skip claim rate or the sunk cost is high enough that the premium is cheaper than the expected loss. On the same $40 listing, an 8% skip claim rate expects $15.22 against $16.20 insured. A $180 item with $85 cost and a $12 label flips insurance ahead ($55.31 vs $54.02) because a 2.5% loss on $99 of sunk cost is already more than a $1.80 premium.
Is shipping insurance the same as a Standard Envelope or Authenticity Guarantee?
No. Standard Envelope is cheap untracked mail versus a tracked label. Authenticity Guarantee sends the item through a hub. Package protection is an add-on on a tracked label you already bought: skip the extra cost, buy insurance that pays replacement value, or add signature confirmation.