What is the difference between CUSTOMS and INSURANCE values?

The Insurance value is the value that would be collected in the invent of any loss or damage in transit. Marine cargo insurance is different than regular household insurance. The coverage is NOT based on the replacement value, but on the current, depreciated value.

Example: If you buy a new 19" TV for $300 and want to ship it, then the insurance value would be $300. If you bought that TV for $300 two years ago, you would not put down $300, which is what a new one would cost now, but you would put down the depreciated value of the two year old TV, say $200.

The customs value will be the basis for the duties and taxes that you will have to pay overseas. We will also use this value on the U.S. Export Declaration and on any shipment lists that we send overseas for the shipment.

 

This value is much harder to determine, as different countries and different organizations require different values. It is best to check with your organization and see what they suggest, or if you know some individuals already on the same field, ask their opinion.

Some countries have minimum values that they will accept for certain categories, to keep people from under-declaring everything. Some organizations take a percentage off the insurance value to figure the customs value. As a “general rule of thumb” we tell everyone that the customs value should reflect the new or used, depreciated value as it is at that moment. We like to tell people to put a “garage sale” value on it, as if you were to buy it from a garage sale or thrift store. In some ways, this makes the customs value and the insurance value almost the same. We realize that no one wants to be hit with 500% duty on anything, but at the same time it isn’t fair, to try and deceive the governments of other countries, intentionally.

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