Do US delivery companies pay out insurance if the declared value of a package is $0?

Question

I'm in the UK and about 6 months ago I sent some sports cards to a friend of mine in the US to get professionally graded through PSA^✝. This took a while due to the pandemic, but PSA has now returned the cards to him. Based on the grades they have received compared against recent eBay sales, they have a total value somewhere in the region of $15,000.

He wants to send the cards back to me, but I want to have them insured in case they get lost in transit (I've heard a lot of stories about packages going missing during the pandemic). He is under the impression that insurance will not pay out unless the package has a declared value which is equal to or greater than the that amount.

In declaring the value at $15,000, the package would be subject to 20% VAT when it arrives back in the UK (~$3,000). Where the contents of the package are mine to begin with and they were only sent to the US with the intent of being sent straight back anyway, I'm not sure if this is something I should be expected to pay.

Do delivery companies pay out full insurance if the declared value does not match the insured value?

If for legal reasons I am expected to pay VAT on the package when it returns to the UK then I am absolutely okay with that, I'm not trying to commit fraud. I'm simply not sure where I stand in this situation as this isn't something I've actively purchased from the US.

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^{✝ I'll note here that I had originally asked this question on the Law SE site but the conversation ended up being derailed into a discussion about how this may be part of a scam that I've fallen for. I'd just like to clarify that my friend is a card collector himself who I've known for many years who has turned his collection into a profession - he deals with PSA on a monthly basis. The only reason I went through him instead of dealing with PSA directly is because he is already a PSA member and it avoided an upfront subscription fee. I went with PSA as they are significantly more reputable than any UK/European card grading company.}

Answer 1

6 months ago I sent some sports cards

The goods should have been declared under Customs Procedure Codes 23 00 000.

Temporary export for return in an unaltered state.

Free circulation goods not proper to any other export CPC, which are intended to be returned unaltered and then declared for returned goods relief (RGR). Including the following and similar types of goods exported as freight:

• professional effects such as tools, survey, film and radio equipment, theatrical properties, musical instruments
• works of art and other items exported solely for exhibition, display or demonstration
• trade samples trophies belonging to a sporting or organising body based in the UK
• other goods on hire or loan, or for use in projects overseas

https://www.gov.uk/government/publications/uk-trade-tariff-customs-procedure-codes/exports-customs-procedure-codes#customs-procedure-codes-starting-with-23

Perhaps you can contact the authorities specialised on this matter:

https://www.gov.uk/government/publications/notice-236-returned-goods-relief/notice-236-returned-goods-relief#relief-conditions

You don’t need to be pre-authorised by HMRC to use RGR.

We will consider alternative evidence which clearly identifies the goods, relates to their export and confirms the export of those goods and their duty status at export

Normally, Royal Mail and USPS will not provide Customs Broker services. On other other hand, express couriers such as Fedex UPS DHL etc may provide such services, sometimes even for free. A Customs Broker would help you fill in forms, and lend you their "registration number".

He is under the impression that insurance will not pay out unless the package has a declared value which is equal to or greater than the that amount.

For USPS, Royal Mail, or other postal union members, yes customs value = declared insurance value, unless the value is very low and the mail product comes with free insurance to cover that low value.

I've heard a lot of stories about packages going missing during the pandemic

Insurance offered by postal union during the pandemic may not be reliable. The Sender has to initiate the claim process, and the Recipient's postal service is responsible for tracing or paying such claims. The Sender's or Recipient's postal service may suspend insurance coverage or claim at any given moment.