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Section 2-2: Total loss

  • Clause 18-8. Total loss

    The assured may claim compensation for a total loss if the MOU is lost without there being any prospect of it being recovered, or if the MOU is so badly damaged that it cannot be repaired.

    No deductions shall be made in the claims adjustment for unrepaired damage sustained by the MOU in connection with an earlier casualty.

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    Clause 18-8. Total loss

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-1. Reference is made to the Commentary to Cl. 11-1. 

  • Clause 18-9. Salvage attempts

    The insurer is entitled to attempt to salvage the MOU at its own expense and risk. The assured shall in that event do its utmost to enable the insurer to carry out the salvage operation.

    If the salvage operation has not been completed within six months from the date the insurer was notified of the casualty, the assured is entitled to claim compensation for a total loss. If the salvage operation is delayed due to difficult ice conditions, the time-limit shall be extended correspondingly, but not by more than six months.

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    Clause 18-9. Salvage attempts

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-2. Reference is made to the Commentary to Cl. 11-2. 

  • Clause 18-10. Condemnation

    The assured may claim compensation for a total loss if the conditions for condemnation of the MOU are met.

    The conditions for condemnation are met when casualty damage is so extensive that the cost of repairing the MOU will amount to at least 80 % of the insurable value or of the value of the MOU after repairs if the latter is higher than the insurable value. If two or more insurances have been effected against the same perils but with different valuations, the highest valuation shall form the basis of the calculation.

    The value of the MOU after repairs shall be determined on the basis of the market value at the time when the assured makes its request for a condemnation.

    Casualty damage shall be deemed to include only such damage as has been reported to the insurer concerned and surveyed by it in the course of the last three years prior to the casualty that gives rise to the request for condemnation. Costs of repairs are deemed to include all costs of removal and repairs which, at the time when the request for condemnation is submitted, must be anticipated if the MOU is to be repaired except, however, salvage awards or compensation for depreciation in value under Cl. 18-17, sub-clause 4.

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    Clause 18-10. Condemnation

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-3. Reference is made to the Commentary to Cl. 11-3.

  • Clause 18-11. Condemnation in the event of a combination of perils

    If the casualty which gives rise to the condemnation is also caused by perils not covered by the insurance, the compensation shall be reduced correspondingly, cf. Cl. 2-13, Cl. 2-14 and Cl. 2-16.

    If the casualty is caused by such combination of marine and war perils as referred to in Cl. 2-14, second sentence, cf. Cl. 2-16, the decision whether the conditions for a condemnation are met shall be based on the valuation applicable to the insurance against marine perils.

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    Clause 18-11. Condemnation in the event of a combination of perils

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-4. Reference is made to the Commentary to Cl. 11-4. 

  • Clause 18-12. Request for condemnation

    If the assured wishes the MOU to be condemned, the assured must submit a request to the insurer without undue delay after the MOU has been salvaged and it has had an opportunity to survey the damage. This request may be withdrawn as long as it has not been accepted by the insurer.

    Whether the assured or the insurer salvages or fails to salvage the MOU shall not imply an approval or waiver respectively of the right to condemnation.

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    Clause 18-12. Request for condemnation

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-5. Reference is made to the Commentary to Cl. 11-5. 

  • Clause 18-13. Removal of the MOU

    If the assured has requested a condemnation of the MOU, the insurer may demand its removal to a place where the damage may be properly surveyed. The demand must be made without undue delay after the MOU has been salvaged.

    The insurer shall bear the costs of the removal and liability for any loss arising during or as a consequence of the removal which is not covered by other insurers.

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    Clause 18-13. Removal of the MOU

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-6. Reference is made to the Commentary to Cl. 11-6. 

  • Clause 18-14. Missing or abandoned MOU

    If the MOU is reported missing, the assured may claim for a total loss when three months have elapsed from the date on which the MOU was last heard of. If the MOU is reported missing under circumstances that give reason to assume that it is icebound and will subsequently be recovered, the time-limit is twelve months.

    If the MOU has been abandoned by the crew at sea without its subsequent fate being known, the assured may claim for a total loss when three months have elapsed from the day when the MOU was abandoned. If it was abandoned because it was icebound, the time-limit is twelve months. If the MOU has been seen after being abandoned, the time-limit runs from the day on which it was last seen.

    If, before expiry of the time-limit mentioned in sub-clauses 1 and 2, it is clear that the assured will not recover the MOU, the assured may immediately claim for a total loss. If the time-limit has expired and the assured has submitted a claim for a total loss, the insurer may not reject the claim because the MOU is subsequently recovered.

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    Clause 18-14. Missing or abandoned MOU

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-7 apart from that the words “at the latest, expected to arrive in port” is replaced by the words “last heard of” as the starting point of the three months period. Reference is made to the Commentary to Cl. 11-7. 

  • Clause 18-15. Extension of the insurance when the MOU is missing or abandoned

    If upon expiry of the insurance period a situation exists as referred to in Cl. 18-14 and the MOU is subsequently recovered without the assured being entitled to claim for a total loss, the insurance is extended until the MOU has arrived and is secured at a safe location. If the MOU is damaged, the rules contained in Cl. 18-5 shall thereafter apply.

    However, the insurance shall under no circumstances be extended beyond two years after the expiry of the insurance period.

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    Clause 18-15. Extension of the insurance when the MOU is missing or abandoned

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-8. Reference is made to the Commentary to Cl. 11-8. 

  • Clause 18-16. Liability of the insurer during the period of clarification

    If the assured is entitled to claim for a total loss in accordance with Cl. 18-9, sub-clause 2, Cl. 18-10 and Cl. 18-14, an insurer who is not liable for the total loss shall not be liable for new casualties occurring after the casualty that resulted in a total loss.

    The insurer who is liable for the total loss shall cover the assured’s liability for damages in accordance with Cl. 18-35 to Cl. 18-38 regardless of whether such liability has arisen as a result of marine perils or war perils, provided that the liability has arisen subsequent to the casualty that resulted in the total loss, but before the claim was settled and, at the latest, within two years of the expiry of the insurance period.

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    Clause 18-16. Liability of the insurer during the period of clarification

    This Clause was new in the 2013 Plan and is verbatim the same as Cl. 11-9. Reference is made to the Commentary to Cl. 11-9.