Consumer Affairs, a US-based consumer news and advocacy site says a coin seller on eBay found that the shipping insurance he purchased for numerous sales he did was worthless. Of course, he found this only after filing the insurance claim when there was an issue with shipping
Moneylife Digital Team
Sellers on e-commerce websites like eBay buy shipping insurance for the items they sell. Here is the reason given by eBay India website: In most circumstances, buyers do not expect to pay for the cost of shipping insurance. This change also reflects the industry— and eBay—standard practice that sellers are responsible for their items until they are safely in their customers’ hands.”
The eBay India website also has following FAQ about coin shipping insurance : “I sell rare, antique, or one-of-a-kind items that I must insure. How can I insure these items? There are several ways to the insure items you sell. Check with your shipping carrier for insurance options, or contact a third-party shipping insurance provider for insurance coverage.” eBay India is clearly putting the onus on the seller to do the due diligence on the insurance cover fine prints.
eBay (US) is facing a lawsuit from one disgruntled seller. A lawsuit alleges that eBay insurance doesn't cover commonly-shipped items. A coin seller insured his coins only to learn the policy doesn't cover coins. The revelation came only after a claim was filed when there was shipping problem.
According to ConsumerAffairs.com –
In a US federal class action, lead plaintiff Luke Knowles claims eBay knows its ShipCover insurance excludes entire categories of products from coverage, but doesn’'t disclose that to sellers when they buy the shipping insurance.
Knowles said he regularly sells coins on eBay and buys ShipCover insurance to cover them. When a buyer notified him that a package he sent arrived open, with the coin missing, Knowles says, he refunded the buyer the purchase price and then filed a claim under the ShipCover insurance, but the claim was denied by eBay’s insurer, which claimed that the item insured is on the list of items that are ineligible for coverage.
Knowles says he selected the proper category—“Coins & Paper Money”—when he bought the insurance. If the company was not going to cover coins, it should not have taken his premium. The ShipCover policy excludes from coverage coins, bullions, loose diamonds or stones, stocks, bonds, currency, deeds, evidences of debt, travelers checks, money orders, gift certificates, calling cards, lottery tickets, admission tickets, or any other negotiable documents. These exclusions are not evident on the checkout page, even though that page offers the insurance sets the insured value, and that determines the price of insurance.
Knowles said he would not have bought insurance to protect coins if he had known that it did not, in fact, cover coins and asserts that no one else would buy such insurance either.
His suit names eBay, eBay Insurances Services, Brown & Brown of Missouri, and Fireman's Fund Insurance Co.