Quote Originally Posted by bitfield View Post
I'm sure this used to be the case, but it seems to have changed:

"Basic compensation for actual loss: Up to £50 for the Royal Mail Special Delivery Guaranteed by 9am service and £500 for the Royal Mail Special Delivery Guaranteed by 1pm service or the market value whichever is the lower and the fee repaid.

Enhanced compensation up to £2500 is available if purchased at the time of posting."
—Making a claim for a lost item

So you'll get the amount insured even if the actual value is higher.
Think they may have covered themselves with this from the T&Cs

Prohibitions, Restrictions and Undeliverable Items
There are certain dangerous and hazardous goods which are unsuitable for conveyance by us and are therefore prohibited. Items worth more than £2500 are also prohibited. Our compensation does not cover certain types of goods. We reserve the right in certain circumstances to destroy an undeliverable item.
If in doubt, please ask at the counter, call us on 08457 950950, or visit www.royalmail.com

http://www.royalmail.com/sites/defau..._April2013.pdf