Obligation to Seller

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para7452

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Hey guys, did a search and couldn't find anything on this, so thought that I'd post here:

We often sell knives on this site, and unless they are something collectible, especially as in the case of production knives, they go for less than they went for when new. When I sell something, I am in the habit of insuring it for its NEW cost when I send it to the prospective buyer. Now, I've never had it happen, but what if it's lost or heavily damaged in transit? Say I sold a sword for 500.00, that I'd originally paid 1000.00 for. I insure it for its replacement value of 1000.00, but it's lost. Would the buyer be entitled to a like item, or would they be entitled to their 500.00?

Has anyone had any dealings with this?

Thanks guys,
James
 
I think a buyer is entitled to their money back, not a "replacement", should an insurance claim become necessary. Basically you are just reversing the original deal.

whitie
 
Insurance will not compensate you for more than the lost or damaged item was worth. You have to prove what it was worth to them before they'll pay you, and if you bought more insurance than that you just wasted your money.
 
Cougar Allen said:
Insurance will not compensate you for more than the lost or damaged item was worth. You have to prove what it was worth to them before they'll pay you, and if you bought more insurance than that you just wasted your money.
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That is correct.

Let's just say you have the reciept for it showing that you paid $1000 bucks, and got that amount from the insurance.
In my mind, whoever paid to insure it for that amount should get the money.
If the buyer paid for the insurance, then the money is his.

If it were me that sold it, and paid to insure it for the original amount, given the amount of money involved in this situation, I'd give the buyer his $500 back, plus $100 for the trouble. I'd still be making $400 out of it, and it would be worth $100 if we could both be happy and make out on the deal.
 
Sounds good, thanks guys. I always keep receipts for the original amount of purchase. Don't want to waste money.
 
bobert said:
That is correct.
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In a broader sense, the correct answer is:

it depends on the deal you have with the insurance company and
the deal you have with your buyer.

The general rule is that your customer is not entitled to the benefit that you receive from your insurance company.

It may look tricky, but it isn't.

You have one deal with your insurance company. That deal is technically a "contract". You have another deal with your customer. It is also technically a "contract". The two contracts ("deals") are completely separate and distinct from each other, even though they concern the same item (the item that was sold/insured.)

So unless agreed otherwise, if an insured item is damaged, you collect the insurance proceeds.

And unless agreed otherwise, the buyer receives their money back.

The seller and buyer end up in the same place - relative to each other - "as if the sale (deal) had never been made".

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I do hope this clarifies things for you.
 
I'm not sure I understand the question completely.The seller/shipper has the contract with the insurance carrier,even if the customer pay's for the shipping.The customer is only entitled to a refund of what he paid to the seller or the product,even if the insurance paid out a higher amount.
 
TOMBSTONE said:
The seller/shipper has the contract with the insurance carrier,even if the customer pay's for the shipping.The customer is only entitled to a refund of what he paid to the seller or the product,even if the insurance paid out a higher amount.
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Well stated.
 
For the headache the shipper is going to get trying to collect on the insurance claim, the seller should darn well be entitiled to any extra that the insurance company pays.

Even if you have a receipt, most if not all insurance companies will look at the age of a product, consider it used, and offer an amount lower than was originally paid. If the knife is a collector piece that has appreciated, the shipper is going to have to provide an appraisal from an accepted expert. Believe me, if the seller is going to try to get what was originally paid for the knife, he/she is going to earn every penny they get back.
 
Insuring stuff is easy to do. All of the shippers are very eager to take your money and let you assume that all is well. Now, when the item goes missing try going back and collect on that insurance. You are going to be in for a more than likely unpleasant experience and will be lucky to collect on the insurance. For sure it will take considerably longer than you would expect.

Like Keith said above, you will earn every penny of what you collect, especially with UPS and the US Post office.

In your case above I would refund the buyer's original purchase price right away since it's not his fault the package did not arrive. Collecting the insurance is your problem as the shipper, not the buyer's.
 
This ones simple. If the you sell a knife and it becomes lost/stolen, you owe the seller what he paid,,,standard procedure.
 
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