State Farm Insurance License Practice Exam

What distinguishes a Motor Truck Cargo Policy from a standard cargo policy?

1. It covers personal items stored in trucks

2. It protects a carrier against liability for domestic shipments

3. It only applies to international shipping

4. It offers no coverage for backhauls

The correct answer is: It protects a carrier against liability for domestic shipments

A Motor Truck Cargo Policy is specifically designed to provide coverage for carriers transporting goods over land, which is distinct from a standard cargo policy that might not offer the same level of protection tailored to the needs of trucking companies. The Motor Truck Cargo Policy protects the carrier against liability not only for damage to the cargo itself but also for other issues that may arise during the transportation process. This type of policy is notable for its focus on domestic shipments, ensuring that carriers are financially protected while transporting goods within the country. By offering coverage for risks involved with moving freight—such as theft, damage, or loss—the Motor Truck Cargo Policy fulfills a crucial gap for trucking businesses that standard cargo policies may not address effectively. The other options do not accurately represent the key features of a Motor Truck Cargo Policy. It does not cover personal items stored in trucks, it is typically applicable for domestic shipments rather than international only, and while it may have specific terms regarding backhauls, it is not inherently correct to say it offers no coverage for backhauls at all, as it depends on the specific terms of the policy.