What does CIF include that CFR does not?

What does CIF include that CFR does not?

• A. A marine insurance policy (minimum coverage) and the freight to the destination port.
• B. Freight only.
• C. Export duties.
• D. Unloading charges.

Answer: (A)

Understanding the difference between CIF and CFR is about what costs are covered during sea transport. CIF means Cost, Insurance, and Freight, so the seller must cover not only the cost of the goods and the freight to the destination port but also arrange marine insurance for the voyage. CFR, by contrast, covers cost and freight but leaves insurance out. Because the distinguishing feature is the addition of insurance coverage under CIF, the option that mentions both a marine insurance policy (minimum coverage) and the freight to the destination port best captures what CIF adds relative to CFR—the insurance component. Remember, the freight portion is common to both terms, but the insurance is what CIF provides that CFR does not.

Understanding the difference between CIF and CFR is about what costs are covered during sea transport. CIF means Cost, Insurance, and Freight, so the seller must cover not only the cost of the goods and the freight to the destination port but also arrange marine insurance for the voyage. CFR, by contrast, covers cost and freight but leaves insurance out. Because the distinguishing feature is the addition of insurance coverage under CIF, the option that mentions both a marine insurance policy (minimum coverage) and the freight to the destination port best captures what CIF adds relative to CFR—the insurance component. Remember, the freight portion is common to both terms, but the insurance is what CIF provides that CFR does not.