Valuation Off Tackle
Consider that Mr. and Mrs. Smith, shopping for furniture, find a desirable living room ensemble. They sign the sales contract with the retailer, and arrange for delivery.
Their furniture weights 3,000 lbs. and the sale price is $12,000.
Then the unthinkable happens. Between the store and their home, the truck falls off the side of the bridge and into the Chattahoochie River, causing a total loss of the shipment, including the living room ensemble of Mr. and Mrs. Smith.
Unless additional coverages were purchased by the shipper, the carriers pay out for this shipment would be 60 cents per pound, or $1,800 for the Smith’s new living room ensemble. This is dictated by state and federal rules and regulations and is sufficient for many freight carrier situations.
Sound crazy? The maximum payout for a shipment of 20,000 gallons of milk would be much less. If the 60 cent rule were used, the milk would be valued $ 4.80 which is higher than the wholesale cost for the shipment. The payout would in this case would be the actual assessed value, less than 60 cents per pound.