That is the best way of handling declared value: raw replacement value. Some newbie on the PSA board just asked if he should value all his future PSA 10 commons from the 80s at $500 each!?!? ;-) Sure, if you want to pay $35 each to have them graded, go right ahead...
If they spot your cards as way undervalued on intake, they'll put a hold on your order and contact you. If a card does grade a very high grade, way past what you listed as the service level, PSA will contact you after the fact and inform you, and then increase the service level in order to properly insure the package back to you (and cover their piece of the Grade Guarantee). But I've seen group submissions where some were submitted as $50 declared values, became Pop 1 PSA 10s worth probably $1000 each, and PSA did not upgrade the card to a higher level. Now if it's a PSA 10 86 Fleer Jordan rookie or a Hall of Fame rookie card, expect the call.
TLDR: you can be cheap when it comes to declared value, but you can't be nearly that cheap.
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PWCC: The Fish Stinks From the Head
PSA: Regularly Get Cheated
BGS: Can't detect trimming on modern
SGC: Closed auto authentication business
JSA: Approved same T206 Autos before SGC
Oh, what a difference a year makes.
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