AFIK this is standard. I understood it to mean, if UPS lost the package you get the full insurance. But you cannot claim damage unless UPS packed it themselves. Never concerned me with stock packing - especially Schiit stock packing. Others might chime in with better explanation.
My UPS store told me the same thing. However they also said if I show them it was packed in the original box with the original packing material that would also be accepted and insurable.
It just sounds scammy to me. I've had a similar problem before: Package shipped by UPS to me, try to ship it back in the same package was denied. FedEx gives me no problem. Maybe a local thing.
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