Do I need parcel protection insurance for sending parcels?

What it is, if you need it and your rights if things go wrong

Updated 12 June 2024

Consumers lose £670 MILLION to parcel delivery problems every year, according to Citizens Advice. Yet paying for parcel protection insurance is NOT the no-brainer it seems, as your consumer rights give you protection for free. This guide explains your rights, and how to complain and (hopefully) get compensation if your parcel's lost, damaged, or stolen.

This is the first incarnation of this guide. If you've any feedback, please let us know in the parcel protection insurance forum thread.

Many thanks to Marc Gander and the Consumer Action Group team for bringing this issue to our attention and helping us fact-check this guide.

This guide is about sending parcels, NOT receiving or returning them. If you're looking for help with something you've ordered online, or a parcel you're expecting hasn't arrived, see our Parcel delivery rights guide.

Sending a parcel? You may be asked to pay to 'protect' it against loss, damage and theft

When you want to send a parcel, you generally have three options:

Send it via Royal Mail.
Use a parcel delivery firm (such as Evri or DPD).
Use an online parcel broker (such as Parcel Hero or Parcel2Go) to compare prices from multiple delivery firms.

If you opt for a parcel delivery firm or broker, you'll typically be asked if you want to 'protect' your parcel. The idea being that if it's lost, stolen or damaged, you'll be compensated for the value of the package. This is often free for parcels under a certain value (usually £20 to £50), with more expensive items then charged on a sliding scale. For example, when we checked their websites, Evri quoted £3.84 to 'insure' a parcel worth £100, while ParcelMonkey quoted £6.49 for a parcel worth £250.

Importantly, when you take out this cover, you're still getting the same delivery service (unlike when you opt to pay Royal Mail extra to deliver your parcel more quickly, for example). So you're essentially just paying for 'increased liability' – a fancy way of saying the firm agrees to take on more responsibility if something goes wrong.

If you're sending something of high value (either financially or sentimentally), you might be tempted to buy extra protection from the delivery firm/broker for peace of mind. And the delivery firms/brokers often make you feel you have to take the insurance out.

Crucially, that's NOT the case. You ARE protected by consumer rights (which we explain in more detail below). What's more, even if you DO opt to pay extra for the parcel protection, there are significant limitations to be aware of...

Having insurance DOESN'T guarantee your money back

Many parcel delivery services and brokers have long lists of 'exclusions' – items they're not willing to protect, even if you pay extra. These usually include items made of a certain fragile materials – such as glass, ceramic, or plaster – including if something is partially made out of one of these things, for example, a television. And it may also include other items such as food and drink, expensive jewellery, Sim cards or even tickets for an event.

If you're considering paying to protect your parcel, these exclusions may not be obvious when you're buying the protection. So you could end up buying cover that doesn't even include what you're sending – even if you declare what you're sending during the process. There may also be terms and conditions about how you've packaged the item for sending, for example, a parcel delivery service is likely to only cover items it deems as fragile when they're packed in a specific way.

On top of these exclusions, we've had reports from MoneySavers that it can be tricky to get in touch with parcel delivery companies and provide sufficient evidence – even in cases where the parcel meets the extra cover's eligibility criteria.

Royal Mail is slightly different...

Rather than selling parcel protection as an add-on, Royal Mail offers basic protection as standard and then charges extra for different services (for example, first class, second class, signed-for).

So you can opt to pay more depending on when you want the parcel to arrive, whether you want your parcel to be trackable, and whether you want the recipient to sign for the parcel when it's delivered.

If you sent something using Royal Mail that's been lost or damaged, you can make a claim through its online claims centre.
There are also other companies offering parcel insurance...

As well as cover offered directly by the parcel delivery company or broker, we've also spotted other 'third-party' sites offering to insure your parcel for a fee (just the protection element, they don't actually organise or make the delivery themselves).

From what we can see, there's very little reason to use these companies. You'll likely face the same exclusions and difficulties that come with complaining directly to parcel delivery firms and brokers, plus you already have valuable protection in the form of your consumer rights.

Your consumer rights already give you FREE legal protection

The Consumer Rights Act 2015 protects UK consumers when buying both goods and services. This means you have rights by law, which a shop or service provider CAN'T change. For more on how this law protects you when buying goods, see our Consumer rights guide, but when it comes to sending a parcel, the key parts are:

Any service should be carried out with reasonable care and skill, at a reasonable price and within a reasonable time. So, if you pay a delivery firm to deliver your parcel, you can expect a reasonable level of service. (As specified in Sections 49, 51 and 52 of the Consumer Rights Act 2015 respectively.)
You're protected from certain attempts by traders to exclude or limit their liability. So, if the parcel company agrees to deliver your item but says it's not liable to refund the price you paid if they don't do so (or only liable for a small portion of the value), you're still protected. (As specified in Section 57 of the Consumer Rights Act 2015.)

Traders are forbidden from putting in place a 'secondary contract' for a service that duplicates a service you've already paid for. So, if a parcel delivery company says if you pay extra, it will extend its liability to cover the whole value of the item you're sending, this can create a secondary contract, which isn't allowed. (As specified in Section 72 of the Consumer Rights Act 2015.)

When a company's accepted the items and agreed to perform a service, they are bound by the contract to do that with reasonable care and skill – even if you don't take out any extra cover.

So, on paper at least, the Consumer Rights Act provides a good basis for compensation if something goes wrong with your parcel delivery. The reality is slightly more complex, though, and will depend on the nature of any particular claim.

MSE are not lawyers, and we don't offer legal advice, so if you're seeking to rely on the Consumer Rights Act 2015 in any dispute you should consider obtaining independent legal advice.

So, is it worth getting parcel protection? Probably not... but it's complicated

While your consumer rights are rock solid, their application in relation to parcel delivery services within the legal system is difficult to establish.

Say you decide to send a parcel and that parcel arrives damaged, your first step is to contact the company – possibly following up with a formal complaint if necessary (we talk you through it step-by-step below). But if the company doesn't resolve things in a way you're happy with, at the moment your only route for escalating things and trying to get them sorted is through the courts.

While we've heard of people arguing their case (whether they've purchased parcel protection or not) successfully in county courts (or pre-court mediation) and getting compensation for lost, damaged, or stolen parcels as a result, it does take time, perseverance and can have associated costs

So while your consumer rights alone should be sufficient, if you're really worried or something you're sending is very high value, you might want to consider a different way of posting it, such as with Royal Mail.

Step-by-step: How to complain if your parcel's lost, damaged, or stolen

Your consumer rights mean that if your parcel's been lost, damaged or stolen, you could still be entitled to redress – even if you decided not to pay for extra protection. Follow these steps below to make a complaint and request compensation.

Step 1: Contact your parcel delivery provider

If your parcel's been lost, damaged, or stolen, your first port of call should always be to contact the parcel delivery provider or broker you used to arrange your delivery.

It's usually best to send your complaint by email so that you have a written record of your communication, and can attach any supporting evidence you need to (such as photos of how it was packed when it left you).

It'll help if you also send evidence along with any information you can provide about your issue – such as proof that you bought insurance (if applicable), or pictures of the damaged parcel. It can be particularly hard to prove non-delivery, but if you have any tracking information or communications with the delivery driver, make sure to attach these too.

Step 2: Submit a formal complaint

If you purchased the additional protection for your parcel, then hopefully step one should be sufficient. If you didn't, it's likely the firm will say you're not entitled to any compensation. Either way, if you're not happy with the firm's response to your initial complaint, don't give up. It's time to make a formal complaint – you can use one of our templates below to help with the wording.

You should've been told how to submit a formal complaint when you purchased the service, and you can usually find out on the parcel delivery provider's website. Normally, it'll involve filling out an online form or sending an email laying out your issue. If you choose to call to make your complaint, make sure to follow up by email so that there's a written record.

When making your complaint, try to use simple language to explain what has happened, and attach any evidence you have (even if you've shared it with the company before). It can also help to mention your consumer rights.

Important: If you purchased the service through an online broker or comparison site, you should complain to the place you bought the service from first, rather than the company that actually tried to deliver the parcel (for example ParcelHero, rather than Evri).

Template letter if you DON'T HAVE parcel protection insurance

To whom it may concern at: [INSERT PARCEL DELIVERY FIRM / PARCEL BROKER]

I am writing with regards to my parcel delivery: [INSERT REFERENCE NUMBER], which I arranged with your company.

The parcel was arranged to be delivered to [INSERT DELIVERY ADDRESS] on [INSERT DATE], however it was [LOST / DAMAGED].

Part 1 Chapter 4 of the Consumer Rights Act 2015 means I have a legal right to expect that any service I’ve paid for should be carried out with reasonable care and skill.

As the service I paid for has not been carried out as per the terms of our contract, I wish to submit a formal complaint and request for appropriate compensation.

I look forward to receiving your response within 14 days.

Yours faithfully,

[YOUR NAME]
Template letter if you HAVE parcel protection insurance

To whom it may concern at: [INSERT DELIVERY FIRM / PARCEL BROKER]

I am writing with regards to my parcel delivery: [INSERT REFERENCE NUMBER], which I arranged with your company.

The parcel was arranged to be delivered to [INSERT DELIVERY ADDRESS] on [INSERT DATE], however it was [LOST / DAMAGED].

I purchased additional parcel protection from you for [INSERT COST OF PROTECTION]. This was designed to insure the parcel against loss, damage, or theft up to the value of [INSERT VALUE OF PARCEL], which is the value of the contents sent (declared at the point of purchase).

In addition to the insurance I purchased, Part 1 Chapter 4 of the Consumer Rights Act 2015 means I have a legal right to expect that any service I’ve paid for should be carried out with reasonable care and skill.

As the service I paid for has not been carried out as per the terms of our contract, I wish to submit a formal complaint and request appropriate compensation.

I look forward to receiving your response within 14 days.

Yours faithfully,

[YOUR NAME]

Step 3: Consider making a court claim

If you're not satisfied with the company's response to your formal complaint, your last resort is to make a claim through the county court (still often referred to as the 'small claims court').

WARNING: Going to court comes with risk and you should only consider this once you've been through the steps above. If the judge thinks the parcel delivery firm or broker is in the right, you may be asked to pay not just your legal fees, but also the business's legal fees too. So it could end up costing you a lot more than you've already lost.

This route requires quite a bit of dedication, not to mention time, which you just might not feel up to – or you might decide it's not worth the hassle. If you're unsure of the validity of your claim you should always seek independent legal advice. So only take it further if you are willing to accept this risk. If not, then just stamp your feet in frustration, chalk it up to experience, and move on.

However, in some cases just threatening legal action can get a company to back down, and your consumer rights do provide strong protection.

If you do have the appetite to take things further, here's what you'll need to consider.

Send a 'letter of claim'. Include a deadline to reply – 14 days is usually considered reasonable. Make it clear in your letter that you intend to begin a court claim once this deadline has passed.

You should make your claim to the delivery company or broker that you dealt with in the first place. There's a slightly different process if the company is based abroad (for example PackLink) we cover this in more detail here.
Start your claim. If you get no reply (or you're not satisfied with the outcome) you can start your claim. You can do this by downloading a claim form (N1) or submitting your claim online using the Money Claims service. There's a starting fee of between £35 and £455, depending on the size of your claim. If the claim has to go to a court hearing then there will be an additional fee. The court may order that this fee is refunded to you by the other side if you win, BUT NOT IF YOU LOSE.

You can also add interest to the amount of money you are claiming. This varies depending on the nature of a claim, but it usually in the region of 8% a year.
Your claim will be sent to the company. Three things can happen at this point: the company agrees and you get your money, the company disputes your claim and there will be a hearing, or the company doesn't respond to your claim and you can claim judgement by way of default.
Mediation. If the company disputes your claim, you'll be required to attend an hour of free mediation, to see if you can come to an agreement with the company without actually going to court.
Next steps. If you get no response, you can ask the court to order the company to pay you, either by requesting a judgement (if you made your claim online), or filling out either an N225 or N227 form. If the company says it doesn't owe you money or disagrees with the amount you've claimed, you may have to go to a court hearing, where a decision will be made by a judge.

We cover the full process in more details and share advice for each stage in our dedicated Small claims guide.

What happens at the hearing?

The hearing is likely to be held in a small room with just the judge and clerical staff, plus you and the defendant. It should be relatively informal but it's important to keep calm and state your case in a polite and rational manner so that the judge has the chance to hear why you feel you've been wronged, what redress you're seeking, and why.

You'll be given the option to take a 'court familiarisation visit' before your hearing, so that you have a chance to see the court and get a sense of the process, which can be helpful if you're feeling anxious about the day.
How does it work if the company is based in another country?

If you arranged your delivery with a parcel broker not based in the UK, it can be very difficult to bring a court claim against them in another country.

Instead, the best thing to do is bring a claim against the company that actually delivered your parcel, even though you didn't make the contract directly with them – this is called enforcing your 'third party rights'.

The process for bringing a small claim as a 'third party' is the same as any other small claim, but you cannot rely on the consumer rights outlined above as the basis of your claim. You will need to rely on different legislation. There are useful rights contained in the Supply of Goods and Services Act 1982, which requires that a company selling a service must exercise reasonable care and skill, and the Unfair Contract Terms Act 1977, which states that any attempt to restrict or limit liability without any good reason.

FAQs

How much will I get back if something goes wrong with my parcel?

If something goes wrong with the delivery of your parcel, you should get back the value of the item you were trying to send (as long as you accurately declared its value when you bought the service). You're unlikely to get back more than this.

It can be easier to get your money back if you've purchased specific parcel protection insurance – however, you're still eligible to make a claim for the full amount if the company has not lived up to the standards set out in the Consumer Rights Act.
What do I need to make a claim?
Each company will have their own requirements about what information you need to provide for a claim (so double-check its complaints policy too), but as a general rule, you should include the following:

Your name

The address of recipient

Detail of issue, plus any evidence you have (for example photos of damage). If your parcel lost, can be helpful to include a detailed description of the parcel.

A receipt or other proof of purchase of delivery service (and parcel protection insurance if you purchased it)

Evidence of how much it would cost to repair or replace the item you were trying to send

You may also find it helpful to include a note stating your consumer rights, so the company knows that you understand your expectations of their service upfront.
How do I prove something wasn't delivered?

If a parcel you've sent doesn't arrive, it can be difficult to prove that it actually hasn't been delivered – particularly if the company asks for 'proof of an issue' as part of their claims procedure.

If you have them, you could provide include any tracking information you were given, or any messages you exchanged with delivery drivers or customer services representatives.

However, it's important to remember that the company also bears the responsibility of proving that the parcel was delivered. If you don't have any 'proof', you're still entitled to claim.
Where can I find my parcel delivery company / broker's complaint's procedure?
Ofcom (the regulator for the postal industry) have rules that require all parcel delivery services to have a formal complaints procedure in place.

This means that, if you complain to a parcel company, you should be told:

who to contact

which channels you can use to make a complaint

what the complaint process will be, and how long it should take to resolve

that the complaint should be dealt with by staff who have received appropriate training.

Ofcom's advice if you can't find a specific complaints helpline or online form, is to contact the firm's customer services team.

MSE weekly email

FREE weekly MoneySaving email

For all the latest deals, guides and loopholes simply sign up today - it’s spam free!

Show less

MSE Forum

Have your say in our forum!

Go to the MSE Forum

Spotted out of date info/broken links? Email: brokenlink@moneysavingexpert.com

Tesco shopper? You've got two weeks left to spend £14 million of expiring Clubcard vouchers – or extend them with our trick

17 August 2024

If you've got a Tesco Clubcard, check if you have any vouchers close to expiring, as £14 million-worth are due to run out on Saturday 31 August.
Received car finance mis-selling compensation out of the blue? It DOESN'T stop you complaining about the latest scandal

13 August 2024

Some MoneySavers have reported receiving car finance mis-selling compensation payments out of the blue. But these are unrelated to the latest ongoing investigation into hidden commission, which means you CAN still complain about that on top.
Amazon launches new credit card offering rewards on your spending – is it worth getting?

13 August 2024

The Amazon Barclaycard has no annual fee and gives 1% to 2% back on purchases at Amazon and up to 0.5% elsewhere, all paid in the form of gift cards to use at the online retail giant.
Chase cuts rate on popular 5.1% boosted saver – should you ditch and switch?

13 August 2024

Chase has cut the rates on its linked easy-access 'boosted saver' and standard saver accounts by 0.25 percentage points.
NS&I launches new British Savings Bonds paying up to 4.6% if you lock your cash away – but how do they stack up?

13 August 2024

NS&I has refreshed its range of fixed-term 'British Savings Bonds' by adding a two-year option paying 4.6% and a five-year option paying 4.1%. And its three-year bond will now pay newbies 4.35% (up from 4.15%). Here's how they stack up.