Shopify’s built-in shipping insurance and a shipping protection app are not competitors so much as two halves of a plan. Shopify Shipping insurance reimburses you when an insured parcel is lost or damaged. A protection app lets customers pay a small optional fee so your store fixes their order quickly, on your rules. Here is how they compare.
For the concepts, see shipping insurance vs shipping protection.
How does Shopify Shipping insurance work?
According to Shopify’s Help Center:
- It is available when you ship from the US and buy labels in Shopify.
- Up to $200 is included on each eligible label if you have Shopify Payments active and are on the Grow, Advanced or Plus plan.
- Extra coverage costs $0.89 per $100 domestic and $1.29 per $100 international, up to $5,000 per shipment.
- Shipsurance administers the coverage.
- You file claims from the order page in your Shopify admin, from 24 hours after shipping up to 120 days from the shipping date.
- Some services are excluded, such as USPS First Class Mail.
How does a shipping protection app work?
A widget offers protection at the cart, checkout or thank-you page. Customers who add it pay with their order. If the parcel is lost, damaged or stolen, they file a claim on your claims page and you refund, reship or give store credit. With a self-funded app such as Sam Shipping Protection, you keep the fee.
How do they compare?
| Shopify Shipping insurance | Shipping protection app (self-funded) | |
|---|---|---|
| Who pays | You (some included with eligible labels) | The customer, as an optional fee |
| Who is paid | You, after a claim | The customer gets a refund, reship or store credit |
| Porch theft after delivery | Depends on policy terms; often hard to prove | Covered if your rules say so |
| Speed for the customer | Waits on the claim | Fast: you decide |
| Works with any carrier | Labels bought in Shopify only | Any shipping method |
| Effect on margin | A cost per insured parcel | The fee is revenue |
What are the pros and cons?
Shopify Shipping insurance
- Pros: built in, no extra app, some cover included on eligible plans, simple claims from the order page.
- Cons: only for labels bought in Shopify from the US, reimburses you rather than helping the customer quickly, a cost on every insured parcel.
Shipping protection app
- Pros: customer pays, works with any carrier or 3PL, covers theft and delivered-but-not-received if you choose, fee can be revenue.
- Cons: you fund claims yourself on a self-funded app, so you need to price the fee from your claim rate.
Which should you use?
- Low to mid-value orders: a protection app alone usually covers it, alongside the cover carriers already include.
- High-value orders: add Shopify Shipping insurance or declared value on those parcels.
- Ship through a 3PL or your own carrier account: a protection app works regardless of where labels are bought.
Read do Shopify stores need shipping insurance for a decision rule, and the shipping insurance guide for carrier details.
Frequently asked questions
Who provides Shopify Shipping insurance?
Shopify's Help Center says Shipsurance is the insurance administrator for coverage you buy through Shopify.
How long do I have to file a Shopify Shipping insurance claim?
Most claims can be filed from 24 hours after the order ships up to 120 days from the shipping date, from the order page in your Shopify admin.
Can I use Shopify Shipping insurance and a protection app together?
Yes. Insurance reimburses your cost on insured parcels, while the protection app gives customers a fast fix and funds smaller claims from the fees they choose to pay.
Sources
Part of our guide: Shipping insurance →