That sounds like a bit of a stretch to me, if he only paid for 16k of insurance he should only get 16k for the item, Im not sure about the replacement cost, if it was a court of law hed get replacement cost but since he contracted for the insurance i think hed only get the amount he paid which SHOULD equal the amont he insured to
Sorry for the confusion...
It's been a few years since I've been exposed to claims. However, I would imagine the basic declared value rules still apply.
I have no idea what the lost package that was declared for 16k, contained, that was mentioned in the original post. To clear up the confusion I'll give you an example, as if I shipped a package and declared the valued at 16k.
The content of my package is a hardback cookbook that was purchased for $250, 5 years ago. If I had to replace the cookbook today, I would pay $300 for the same book at my local book store. So, $300 is the replacement cost of the cookbook. When I shipped the package I declare value at 16k because I wanted to make sure the package was delivered, not knowing any better because I'm a customer and it just sounds safer. During the claims process, even though I declared value at 16k, UPS will pay the replacement cost of the cookbook which is $300, plus shipping charges.
In the customer's situation, if the replacement cost of their package was 16k, then of course UPS will honor the claim for that amount.
I think the normal claim process is 4-6 weeks. Claims will begin a re-trace on the package, including a driver follow up, if needed, and will include checking overgoods in case the label fell off the package. If it's high value, lost prevention could get involved. UPS does not just pay off high value claims without an investigation.