Shipping Protection vs. Shipping Insurance: What Shoppers Are Actually Buying
Four very different products can sit behind the same checkout toggle. Here is how to tell them apart, in the providers' own words.
Back to the resource centerKey takeaways
- "Shipping protection" is a marketing label. "Insurance" is a legal category defined by state law.
- In several common models, the shopper is not the insured. Some terms say you are a "loss payee" instead.
- Some providers say plainly that their product is not insurance and that the merchant decides claims.
- Whether a product is legally insurance is decided by state law and regulators, based on what it does, not its name.
- Read the terms before you pay. They tell you who pays claims and who regulates them.
What legally counts as insurance?
States define insurance by what a contract does. California Insurance Code § 22 says: "Insurance is a contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event." New York's Insurance Law § 1101 focuses on a promise to pay that depends on a "fortuitous event," meaning something "to a substantial extent beyond the control of either party."
The NAIC has warned that sellers of package protection "may claim these products are warranties, guarantees, or protection plans." In a 2010 opinion about a lost or stolen item, New York's insurance regulator concluded that a company promising to pay for the loss was "not offering a service contract but rather doing an insurance business." Labels don't settle the question. Regulators do.
What are the four kinds of shipping protection?
Every quote below comes from the provider's own website, as of October 2026. We describe each model, not whether any provider complies with any state's law.
Model 1: Licensed insurance
The provider presents the product as insurance and names a licensed agency or insurer.
- Cover Genius / XCover: "Insurance policies issued in the United States of America are provided by Cover Genius Insurance Services, LLC." It publishes state producer license numbers, such as CA 6000406.
- UPS Capital InsureShield: "offered through UPS Capital Insurance Agency, Inc.," described as "a licensed insurance producer."
- Shipsurance: "Licensed by the CDI Number 0E39065," and "This insurance policy is issued by a NONADMITTED Insurance company."
- InsureShip: Licensed by the California Department of Insurance, license #0G55434, and licensed in all 50 states. Established in 2012. Underwritten by Navigators, a Hartford company, rated A+ by AM Best (Navigators Insurance Company, as of 2024).
Model 2: Insurance-backed protection where the shopper is not the insured
A cargo insurance policy exists, but it is issued to the provider. The shopper's fee buys protection from the provider, and the provider's policy backs it.
Route
Route's terms (updated January 9, 2026) say "Route's licensed producer, Route Insurance Solutions, LLC … procures a cargo insurance policy via authorized insurance underwriters … designate Route as the named insured." Route's insurance page describes a "Marine Open Cargo Policy written for the account of Route App, Inc.," effective January 1, 2026 to January 1, 2027: "Coverage is secured via Artex Risk Solutions through Seg Insurance Ltd. and policy number 26-1." Route also states: "Route holds Department of Insurance authorization in all 50 states." For shoppers, the terms say: "You are not an insured or an additional insured under the Route Policy."
Extend
"Eligible shipments are insured under a cargo insurance policy (the "Extend Policy") issued to Extend, Inc. by Overtime Insurance Solutions Corporation and produced through Extend Insurance Agency, Inc. While you are not an insured under the Extend Policy, any reimbursement will be directed to you as a loss payee." Hawaii's Insurance Division lists Overtime Insurance Solutions Corporation among its active captive insurers (list as of June 30, 2026).
Model 3: Protection backed by a provider-affiliated insurer
The provider's materials name an insurer that carries the provider's own name and describe it as a captive.
OrderProtection.com
An unlisted page on OrderProtection.com (at /compliance-old, so it may be an older page), titled "Compliance & Insurance Captive," states: "Eligible shipments are insured under a captive insurance policy issued to OrderProtection.com, Inc. by Order Protection Insurance Ltd. While you are not an insured under the Order Protection Policy, any reimbursement will be directed to you as a loss payee." Its customer terms describe "the package protection service … provided by OrderProtection.com, Inc." to shoppers of third-party retailers.
For this model, a fair question is where the insurer is licensed and which regulator oversees it.
Model 4: "Not insurance" guarantees
The terms say the product is not insurance. Who keeps the fees and who decides and pays claims varies: in some programs it is the merchant, in others the provider. Each provider's own words are below.
Navidium
"Is Navidium App an Insurance Company? No, we are not. We are a software company that allows ecommerce stores and merchants to charge a small fee from their customers and provide a guarantee … that they (the merchant) will either reship, or refund…" To merchants: "You decide when to approve or deny claims."
ShipAid
"ShipAid does not provide insurance … the brand from which you ordered the product will replace the product." Its homepage: "We don't insure packages. We protect relationships."
Corso
"THE VALUE COVERAGE PROVIDED BY THE SERVICES (INCLUDING ANY SHIPPING PROTECTION) IS NOT AND SHALL NOT CONSTITUTE INSURANCE OF ANY KIND WHATSOEVER." Payouts are in the company's "SOLE AND ABSOLUTE DISCRETION." Pricing page: "Protection fees generate revenue that goes to paying for claims" and "Corso pays for approved claims."
ShipInsure
"Shipping Protection is not insurance sold to you by ShipInsure. Any insurance-related arrangements, if any, are solely between ShipInsure and its third-party counterparties, and you are not an insured or additional insured under any policy unless expressly stated in writing." Its homepage, written for merchants: "ShipInsure pays for reorders."
What does each model mean when you file a claim?
| Model | Who reviews your claim | Are you the insured? | If you disagree |
|---|---|---|---|
| 1. Licensed insurance | The insurer or its claims administrator, under the policy | Depends on the policy. Ask. | Appeal, then a complaint to your state insurance department |
| 2. Insurance-backed, shopper not insured | The provider, under its terms | No. You may be a "loss payee." | Appeal to the provider. Your insurance department can tell you whether the named producer is licensed and whether it can review the complaint. |
| 3. Provider-affiliated insurer | The provider, under its terms | No. You may be a "loss payee." | Appeal to the provider. Ask which regulator oversees the insurer. |
| 4. "Not insurance" | Usually the merchant or the provider, often at its discretion | No | Appeal to the merchant; card dispute; state attorney general. Regulators say the insurance department "may not be able to help" when the seller is not licensed. |
Practical steps for a denied claim are in Shipping Protection Claim Denied? What to Do Next.
How can I tell which one I'm buying at checkout?
- Click the info icon or "learn more" link next to the toggle before you pay.
- Search the terms for "insurance," "insured," "loss payee" and "not insurance." These words reveal the model fast.
- Look for a named insurer and a licensed agency. Then verify them with our guide to checking an insurance license.
- Find out who decides claims. Look for "sole discretion" or wording that the merchant approves claims.
- Decide if it's worth it. The NAIC suggests that for porch theft you "consider filing a claim with your homeowners or renters insurance policy."
Frequently Asked Questions
Is shipping protection the same as shipping insurance?
Not necessarily. Some shipping protection is a licensed insurance product, some is backed by a policy that covers the provider, and some providers say in their terms that their product is not insurance at all.
What does "loss payee" mean in shipping protection terms?
In terms like Extend's and OrderProtection.com's, it means you are not an insured under the policy, but any reimbursement is directed to you. Your rights come mainly from the provider's terms.
Is "not insurance" shipping protection illegal?
That depends on state law and on what the product actually does. Several state regulators and the NAIC have warned consumers about unlicensed package protection, but whether a specific product is insurance is for regulators and courts to decide.
Which type of shipping protection is best for shoppers?
Look for terms that clearly name the insurer, the licensed seller, who decides claims and how to appeal. Clear terms make it easier to get help if a claim goes wrong.
Is Route shipping insurance?
As of October 2026, Route's terms describe a cargo insurance policy procured by its licensed producer, Route Insurance Solutions, LLC, with Route as the named insured. Its insurance page describes a Marine Open Cargo Policy through Seg Insurance Ltd., and Route states it "holds Department of Insurance authorization in all 50 states." Its terms also say shoppers are "not an insured or an additional insured under the Route Policy."
Merchants: know what you're offering
InsureShip is licensed by the California Department of Insurance, license #0G55434, and licensed in all 50 states. Established in 2012. Underwritten by Navigators, a Hartford company, rated A+ by AM Best (Navigators Insurance Company, as of 2024). Coverage reaches up to $5,000 per shipment for loss, damage and theft, including porch piracy, and InsureShip handles the claims.
Talk to InsureShipSources
Last checked October 8, 2026. General information, not legal advice. Law and regulators: Cal. Ins. Code § 22 · N.Y. Ins. Law § 1101 · NY DFS OGC Opinion 10-11-12 · NAIC consumer alert · Hawaii Insurance Division captive list. Provider pages (as of October 2026): Cover Genius regulatory · Cover Genius US licenses · InsureShield disclosure · Shipsurance about · Shipsurance questions · Route terms · Route insurance · Route compliance · Extend shipping protection guide · OrderProtection.com compliance page · OrderProtection.com customer terms · Navidium · ShipAid terms · ShipAid homepage · Corso terms · Corso pricing · ShipInsure terms · The Hartford: Navigators fact sheet (Apr 2025)
Written by Kyle Gibson, Compliance Auditor · Updated October 9, 2026