Total loss Flashcards
Actual total loss MIA 57
1) Where subject matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievable deprived thereof, there is an actual total loss
2) In actual total loss, no notice of abandonment need to be given
Missing ship MIA58
Missing ship, MIA 58
Where the ship concerned in the adventure is missing, and after the lapse of a reasonable time no news of her has been received, an actual total loss may be presumed.
Construcive total loss ITC 83
19.1 In ascertaining whether the Vessel is a constructive total loss, the insured value shall be taken as the repaired value and nothing in respect of the damaged or break-up value of the Vessel or wreck shall be taken into account.
19.2 No claim for constructive total loss based upon the cost of recovery and/or repair of the Vessel shall be recoverable hereunder unless such cost would exceed the insured value. In making this determination, only the cost relating to a single accident or sequence of damages arising from the same accident shall be taken into account.
Constructive total loss MIA60
MIA s. 60 Constructive total loss defined.
(1) Subject to any express provision in the policy, there is a constructive total loss where the subject-matter insured is reasonably abandoned on account of its actual total loss appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred.
(2) In particular, there is a constructive total loss—
(i) Where the assured is deprived of the possession of his ship or goods by a peril insured against, and (a) it is unlikely that he can recover the ship or goods, as the case may be, or (b) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered; or
(ii) In the case of damage to a ship, where she is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired. In estimating the cost of repairs, no deduction is to be made in respect of general average contributions to those repairs payable by other interests, but account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship would be liable if repaired; or
(iii) In the case of damage to goods, where the cost of repairing the damage and forwarding the goods to their destination would exceed their value on arrival.
Constructive total loss MIA61
Where there is a constructive total loss the assured may either treat the loss as a partial loss, or abandon the subject-matter insured to the insurer and treat the loss as if it were an actual total loss.
Expenses incurred prior to NOA - can they rank towards CTL? Old practice used to say future was from the date of NOA, but it was later determined that future was from the date/time of casualty – therefore S&L expenses incurred prior to NOA would be taken into account –
‘The Renos’ – costs of recovery or repair before NOA were to be included in the CTL calculation. “It is submitted that in principle the rule must be that the assured should not be penalised by having incurred some expense before he gives notice, which may indeed be essential if he is to form a judgment as to whether the facts justify abandonment, and that he is entitled when deciding whether to abandon to have regard to the totality of the repairing cost, not merely to those costs which have yet to be incurred.”
- “Renos”, The [2019]
- “Brillante Virtuoso”, The [2015]
Notice of abadonment and implications of acceptance/ refusal MIA62
Notice of abandonment, MIA 62
(1) Subject to the provisions of this section, where the assured elects to abandon the subject-matter insured to the insurer, he must give notice of abandonment. If he fails to do so the loss can only be treated as a partial loss.
(2) Notice of abandonment may be given in writing, or by word of mouth, or partly in writing and partly by word of mouth, and may be given in any terms which indicate the intention of the assured to abandon his insured interest in the subject-matter insured unconditionally to the insurer.
(3) Notice of abandonment must be given with reasonable diligence after the receipt of reliable information of the loss, but where the information is of a doubtful character the assured is entitled to a reasonable time to make inquiry.
(4) Where notice of abandonment is properly given, the rights of the assured are not prejudiced by the fact that the insurer refuses to accept the abandonment.
(5) The acceptance of an abandonment may be either express or implied from the conduct of the insurer. The mere silence of the insurer after notice is not an acceptance.
(6) Where notice of abandonment is accepted the abandonment is irrevocable. The acceptance of the notice conclusively admits liability for the loss and the sufficiency of the notice.
(7) Notice of abandonment is unnecessary where, at the time when the assured receives information of the loss, there would be no possibility of benefit to the insurer if notice were given to him.
(8) Notice of abandonment may be waived by the insurer.
(9) Where an insurer has re-insured his risk, no notice of abandonment need be given by him.
Effect of abandonment MIA63
MIA s. 63 Effect of abandonment.
1. Where there is a valid abandonment the insurer is entitled to take over the interest of the assured in whatever may remain of the subject-matter insured, and all proprietary rights incidental thereto.
- Upon the abandonment of a ship, the insurer thereof is entitled to any freight in course of being earned, and which is earned by her subsequent to the casualty causing the loss, less the expenses of earning it incurred after the casualty; and, where the ship is carrying the owner’s goods, the insurer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss.
Common policy provisions concerning constructive total loss MIA27
MIA s. 27 Valued policy.
1. A policy may be either valued or unvalued.
2. A valued policy is a policy which specifies the agreed value of the subject-matter insured.
3. Subject to the provisions of this Act, and in the absence of fraud, the value fixed by the policy is, as between the insurer and assured, conclusive of the insurable value of the subject intended to be insured, whether the loss be total or partial.
4. Unless the policy otherwise provides, the value fixed by the policy is not conclusive for the purpose of determining whether there has been a constructive total loss.
MIA68 Total loss
MIA s. 68 Total loss.
Subject to the provisions of this Act and to any express provision in the policy, where there is a total loss of the subject-matter insured,—
1. If the policy be a valued policy, the measure of indemnity is the sum fixed by the policy:
2. If the policy be an unvalued policy, the measure of indemnity is the insurable value of the subject-matter insured.
Claims in addition to a total loss and against proceeds - MIA79 Rights of subrogation
MIA s. 79 Right of subrogation
1. Where the insurer pays for a total loss, either of the whole, or in the case of goods of any apportionable part, of the subject-matter insured, he thereupon becomes entitled to take over the interest of the assured in whatever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject-matter as from the time of the casualty causing the loss.
- Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject-matter insured, or such part of it as may remain, but he is thereupon subrogated to all rights and remedies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnified, according to this Act, by such payment for the loss.
