Abstract: An in-line inserter device comprises envelope and insert feeding assemblies, an envelope inserting station assembly, a sealing and stacking assembly, and various diverter stations. The envelope feeding assembly withdraws envelopes from a hopper-held envelope stack and conveys them to the inserting station. Each modular insert feeding assembly comprises a hopper-held insert stack disposed above, along, and in line with an insert conveyor. The conveyor, along its track, carries inserts dispensed from the hopper-held insert stacks to the inserting station. Diverter stations are disposed ahead of the envelope inserting station for diversion of envelopes and inserts and ahead of the inserted envelope stacking assembly to divert inserted envelopes, for normal operational purposes and for rectification of sensed faults by rejection and extraction of processed faulty items.