Shopify Shipping Insurance: What’s Included, What It Costs, and How to Claim (2026)

A lost package can cost you more than the order itself. You may need to refund or replace it, spend time handling the claim, and risk losing the customer. Shopify shipping insurance helps protect you from that financial hit by covering eligible lost, damaged, or stolen shipments.

In this guide, I’ll break down what Shopify covers for free, what additional coverage costs, how to add Shopify shipping insurance and file a claim, and when it makes sense to offer shipping protection to customers. I’m Charlie Ngo, an eCommerce expert at BOGOS with 11 years of experience helping Shopify merchants increase sales, lift AOV, and improve conversion rates.

TL;DR

• Shipping insurance protects you, the merchant. Shipping protection is something you sell to your customers.
• Shopify includes up to $200 of insurance free on eligible US labels, as long as you use Shopify Payments and sit on the Grow, Advanced, or Plus plan.
• Extra coverage costs $0.89 per $100 for domestic shipments and $1.29 per $100 for international, up to $5,000.
• You file claims inside your Shopify admin, and Shipsurance pays out, not Shopify and not the carrier.
• To earn revenue instead, a self-funded protection app lets you keep the fee, though you also fund the claims yourself.

1. Shopify shipping insurance vs. shipping protection: What’s the difference?

Shopify shipping insurance and Shopify shipping protection may sound similar, but they usually solve different problems. Here’s the difference at a glance:

If you ship from the US and want to protect your own parcels, the next sections cover Shopify’s built-in shipping insurance, including eligibility, cost, and claims. If you want to offer protection as an optional checkout add-on instead, skip ahead to the Shopify shipping protection section.

Either way, get your Shopify shipping rates right first. Accurate rates keep checkout predictable before you add another shipping-related charge or protection option.

2. What Shopify shipping insurance actually covers

Shopify shipping insurance is administered by Shipsurance rather than Shopify itself. It can reimburse you when an eligible shipment is lost, damaged, or stolen in transit, and some policies may also cover porch theft or “delivered but not received” cases.

That protection matters because package theft is becoming increasingly expensive for online retailers. In 2025, nearly one in three US households (29.7%) reported having a package stolen, while retailers absorbed an estimated $7.9 billion in refunds and replacements, according to Omnisend’s 2025 porch piracy report. The impact can continue after the refund. The same report found that 23% of theft victims shop online less often afterward.

The good news is that some Shopify merchants already get a level of shipping insurance at no extra cost. Let’s look at what’s included free and who qualifies for the free $200 coverage.

#1. What Shopify Shipping insurance includes for free 

Eligible Shopify shipping labels can include up to $200 USD of insurance coverage at no extra cost. This limit applies per shipment and does not stack across multiple services.

According to Shopify’s shipping insurance documentation, a shipment must meet three basic conditions to qualify for insurance:

• It ships from the United States.
• The label is purchased through Shopify.
• The products comply with Shipsurance’s Terms of Service.

To receive the free $200 coverage, you also need Shopify Payments enabled and a store on the Grow, Advanced, or Plus plan. The same free coverage applies to eligible Managed Markets labels on those plans. Basic stores do not get the $200 coverage for free, but they can still purchase insurance separately.

#2. How Shopify insurance compares with carrier coverage

Before buying extra insurance, check what your carrier already includes:

• USPS Priority Mail, Priority Mail Express, and Ground Advantage include up to $100 of coverage.
• UPS and FedEx also generally include up to $100 of liability by default.
• First-Class Mail does not cover.

The important part is that carrier coverage and Shopify’s Shipsurance coverage do not stack. If a shipment is covered through Shipsurance, you file the claim with Shipsurance rather than adding the carrier’s coverage on top.

The other major difference is the claim window. If you rely only on carrier coverage, each carrier has its own deadlines for lost and damaged packages:

3. How to add Shopify shipping insurance to a label, and what it costs 

The free $200 covers many lower-value orders, but once an order exceeds that amount, the remaining value is still at risk. Paid coverage closes that gap, letting you insure up to $5,000 per shipment for higher-value orders.

Adding it is simple because insurance is selected while you purchase the shipping label. Before walking through the steps, here’s what the extra coverage costs.

#1. What extra coverage costs

Additional insurance scales with the value of the shipment. Shopify charges $0.89 per $100 of coverage for domestic shipments and $1.29 per $100 for international shipments, in $100 increments up to $5,000 per shipment.

For example, if you insure $250 of goods plus $20.50 in international shipping, Shopify rounds the covered amount up to $300. At $1.29 per $100, the total insurance cost is $3.87.

#2. How to add shipping insurance on Shopify in five steps

You do this directly on the label purchase screen, so no separate app or settings page is involved.

• Step 1: From your Shopify admin, go to Orders and click the order you want to add.
• Step 2: In the Unfulfilled section, click Create shipping label.
• Step 3: Find the Shipping Insurance section and confirm the included coverage, up to $200.
• Step 4: To add more, select Insure full shipment value or Insure custom amount, then enter the coverage.
• Step 5: Buy the label, and the insurance is tied to that shipment.

Once you buy the label, the insurance is tied to that specific shipment and appears on the order. If the parcel is lost or damaged in transit, you can file a claim instead of absorbing the full cost yourself.

If you no longer need the label, you can void it within 30 days. For unused labels, the insurance premium is credited toward future insurance purchases.

4. A step-by-step guide to creating a Shopify shipping insurance claim 

If an insured shipment is lost or damaged, you can file a claim directly from the affected order in your Shopify admin. For Shopify shipping insurance claims, Shipsurance reviews the claim and handles the payout. You can also start a claim from the Shopify mobile app.

#1. File a claim in eight steps 

• Step 1: Go to Orders and open the affected order.
• Step 2: In the fulfillment card, click the … menu, then select File claim.
• Step 3: Under Claim details, choose the claim type, discovery date, and reason.
• Step 4: Under Claim amount, enter the amount you are claiming. It cannot exceed the insured amount.
• Step 5: Under Payout details, choose your payout method and enter the required information.
• Step 6: Add the email address Shipsurance should use to contact you.
• Step 7: Confirm that you have read and understood the disclaimer. Finally, click File claim.

After filing, you receive a claim ID and a link to the Shipsurance portal so you can track its status. From there, the payout goes to the method you chose, so a clean claim turns a lost parcel back into recovered revenue rather than a swallowed cost.

#2. Claim rules worth knowing before you need them

Before filing, keep these rules in mind:

• Claims can generally be submitted from 24 hours after shipment up to 120 days from the ship date.
• The insurance applies to eligible labels purchased through Shopify Shipping, not labels bought through third-party shipping apps.
• Shipsurance handles insurance claims directly, so claim-specific questions should go to Shipsurance rather than Shopify Support.

#3. Keep your orders claim-ready

Good documentation can make the claims process much smoother. For higher-value shipments, photograph the package before dispatch, keep invoices and proof of value accessible, and save any customer messages or photos showing loss or damage. 

If a support teammate handles order issues, make sure they know the 120-day window, because a claim should never lapse just because a ticket sat in a queue. When a claim ends in a refund, our guide on how to refund shipping on Shopify covers the mechanics.

Move from paying for insurance to earning from protection 

So far, we’ve focused on insurance that you pay for to protect your shipments.

Shopify also offers a different approach through shipping protection apps. These let you add an optional protection fee at checkout that customers can choose to pay. If they do, you collect those fees as add-on revenue and handle eligible claims yourself.

If protection fees stay higher than your replacement and refund costs, the difference becomes additional revenue. The trade-off is that you fund the claims, so a spike in lost, damaged, or stolen orders can quickly eat into that margin.

If you want to run this type of merchant-managed protection, these three Shopify shipping protection apps are strong options to compare:

Use a promotion app to turn the protection fee into an AOV lift

Shipping protection already gives average order value a small lift by adding a paid line item to the cart. You can make that fee work harder by placing your next reward, whether it is a free gift, a free-shipping threshold, or a tiered discount, just above the typical protected cart value.

For example, if a protected order usually lands around $72, set the next reward at $80. The shopper is now only $8 away from unlocking something extra, and adding one more item feels like a smart move rather than extra spending.

With BOGOS: Free Gift Bundle Upsell, you can set these spend-based rewards and make the next threshold visible through a Progress Bar in the cart drawer. A message like “You’re only $8 away from a free gift” shows shoppers exactly what they need to spend next. The protection fee moves them closer to the threshold, and the reward gives them a reason to cross it.

To go deeper on how spend thresholds drive larger carts, see our guide to average order value and post-purchase upsell flows.

Conclusion

Shipping insurance defends your margin, and selling protection can grow it. Both point toward the same goal, which is protecting the revenue you have already earned along with the repeat purchase that follows a clean delivery.

The best place to start is simple. Check your plan and Shopify Payments status in admin to confirm your free $200, then choose to buy, sell, or self-insure using the exposure math above. From there, it helps to treat the checkout as more than a place to guard orders. It is where you can protect revenue and grow it in the very same click.

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