Freight insurance (FOV, 'declared value charge') is the question sellers answer emotionally — yes because they're scared, no because they're cheap — when it's a clean expected-value problem. Here's the math that decides it order by order.
The break-even
FOV typically runs 0.5–2% of declared value. Real shipment loss/damage rates run maybe 0.5–1.5% for well-packed goods on standard lanes. Roughly break-even on paper — which means insurance is worth it when your goods are fragile, high-value, or irreplaceable; marginal otherwise.
The evidence multiplier
An insured parcel without proof still loses — the claim needs declared value on the booking, packing photos and damage evidence at receipt. Sellers who insure but don't photo the packed order win claims at goodwill, not on paper.
When to always buy
Above ~₹3,000–5,000 order value, on one-of-one items (collectibles, handmade), on fragile categories, and whenever the customer's order value justifies the ₹60–150 cost — peace of mind is also a product.
When to skip
Replaceable low-value goods, items under ₹1,000, anything where a refund is cheaper than the premium. Self-insure: the premiums you didn't pay are a claim fund for the rare loss.
Pakka Parcel automates exactly this — the pipeline from order to AWB without the manual steps.
See how →The playbook
Set the ₹3,000 line
Above it, insure; below it, self-insure.
Photo every packed order
Insurance without evidence is a negotiation, not a claim.
Declare real value
Under-declaring to save FOV voids the claim.
Track your actual loss rate
Your real claim rate sets your real break-even.
