CMC CMC Valuation Coverage & Liability Options 1 — Questions and Answers
Question 1: What is the minimum valuation level that a mover must offer on an interstate household goods shipment under federal law?
- Released rate at 60 cents per pound per article (Correct answer)
- Full replacement value at no charge
- $1.25 per pound per article
- Actual cash value coverage
Correct answer: Released rate at 60 cents per pound per article
Under 49 CFR Part 375, the minimum released rate valuation is 60 cents per pound per article, which carriers may offer at no additional charge.
Question 2: Under Full Value Protection (FVP), what is the carrier's liability if an item is lost or destroyed?
- Repair, replace with like item, or pay current market replacement value (Correct answer)
- Pay 60 cents per pound of the item
- Pay actual cash value minus depreciation
- Return a like-for-like item only
Correct answer: Repair, replace with like item, or pay current market replacement value
Under FVP, the carrier must repair the item, replace it with a like item, or pay the current market replacement value—whichever is least costly.
Question 3: What term describes the customer's declaration of a higher value for the entire shipment to increase carrier liability beyond the standard rate?
- Declared value (Correct answer)
- Lump-sum value
- Released value
- Assessed value
Correct answer: Declared value
A declared value is the customer's statement of the shipment's total value, which sets the carrier's maximum liability for loss or damage.
Question 4: If a customer selects released rate valuation and an item worth $800 weighing 10 lbs is destroyed, what does the carrier owe?
- $6.00 (Correct answer)
- $800.00
- $48.00
- $100.00
Correct answer: $6.00
At released rate (60 cents per pound), a 10-pound item yields a maximum payment of $6.00 regardless of the item's actual market value.
Question 5: What deductible option can a customer choose under Full Value Protection to reduce the premium cost?
- A higher deductible amount (Correct answer)
- A lower declared value
- A partial release waiver
- A binding estimate adjustment
Correct answer: A higher deductible amount
Customers can elect a higher deductible under FVP, which reduces their out-of-pocket premium in exchange for bearing more of any loss themselves.
Question 6: Which federal regulation establishes the valuation and liability rules for interstate household goods carriers?
- 49 CFR Part 375 (Correct answer)
- 49 CFR Part 387
- 49 CFR Part 376
- 49 CFR Part 392
Correct answer: 49 CFR Part 375
49 CFR Part 375 contains the consumer protection regulations for household goods, including the required valuation options carriers must offer.
CMC CMC Valuation Coverage & Liability Options 1
What is the minimum valuation level that a mover must offer on an interstate household goods shipment under federal law?