Lump-Sum & Binding Estimate Types Flashcards

Which type of estimate is most appropriate for a customer who has an unpredictable number of boxes and wants guaranteed price protection?

Answer: Binding estimate

A binding estimate provides guaranteed price protection regardless of actual weight, making it ideal for customers who are uncertain about their final shipment size.

A lump-sum move includes 'full-value protection' in the lump-sum price. If the customer purchases additional third-party insurance, who is responsible for coordinating the claim?

Answer: The customer coordinates with both the carrier and the third-party insurer

When a customer has both carrier-provided full-value protection and third-party insurance, the customer must coordinate claims with each entity separately.

A binding estimate is signed for a move from Texas to California. The customer later decides to reroute delivery to Nevada. This change:

Answer: May void the binding estimate and require a new written agreement

A destination change is a material alteration to the original scope, which typically voids the existing binding estimate and necessitates a new written agreement.

In the context of lump-sum corporate relocations, 'tax gross-up' refers to:

Answer: Increasing the lump-sum amount to cover the employee's income tax liability on the payment

A tax gross-up increases the lump-sum payment so that after the employee pays income tax on the relocation allowance, they receive the intended net amount.

A carrier provides a binding estimate but fails to perform the move on the agreed date without notifying the customer. Under FMCSA rules, the customer's remedy includes:

Answer: Seeking reimbursement for actual expenses incurred due to the carrier's failure

When a carrier fails to pick up or deliver as agreed, the customer may seek reimbursement for documented expenses caused by the carrier's non-performance.

Which element is required on a written binding estimate to make it enforceable?

Answer: Carrier's MC number, origin, destination, and the total binding price

A binding estimate must include the carrier's MC number, origin and destination addresses, services to be performed, and the total binding price to be enforceable.

When comparing a binding estimate to a guaranteed price quote, the key distinction for a CMC to communicate to a client is:

Answer: Both terms describe the same fixed-price commitment but may differ in marketing terminology by carrier

FMCSA uses the term 'binding estimate'; 'guaranteed price quote' is a marketing term some carriers use for the same concept, but both represent a fixed-price commitment.