TRIP Insurance Principles and Coverages 3

Question 1

Under a Motor Truck Cargo policy, which valuation basis compensates the insured for the invoice value of goods plus freight charges?

Accepted Answer

Shipper's invoice value plus freight

Answer

Many cargo policies value goods at the shipper's invoice price plus freight charges, ensuring the shipper recovers the full cost of goods in transit.

Question 2

What is the purpose of a 'waiver of subrogation' endorsement on a commercial auto policy?

Accepted Answer

It prevents the insurer from seeking recovery from a specified third party after paying a claim

Answer

A waiver of subrogation endorsement contractually prohibits the insurer from pursuing recovery against a named third party, often required by contract between business partners.

Question 3

Which condition in a commercial insurance policy requires the insured to take reasonable steps to protect property from further damage after a loss?

Accepted Answer

Duties after loss — protect property

Answer

The duties-after-loss condition obligates the insured to mitigate additional damage following a covered loss, such as covering a damaged roof to prevent water intrusion.

Question 4

A trucker's policy has a $500 deductible for physical damage. The insured suffers $3,200 in collision damage. How much does the insurer pay?

Accepted Answer

$2,700

Answer

The insurer pays the loss amount minus the deductible: $3,200 − $500 = $2,700.

Question 5

Which type of transportation policy covers goods owned by the insured while they are being shipped by common carriers, railroads, or airlines?

Accepted Answer

Inland marine — shipper's interest policy

Answer

A shipper's interest (inland marine) policy covers the cargo owner's goods while in the custody of various carriers during domestic transit.

(TRIP) Transportation Risk and Insurance Professional Practice Test

(TRIP) Transportation Risk and Insurance Professional Practice Test

TRIP Insurance Principles and Coverages 3