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Section 57 of The Marine Insurance Act, 1963

(1)Where the subject-matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof, there is an actual total loss.
(2)In the case of an actual total loss no notice of abandonment need be given.

Summary

Section 57 defines what counts as an actual total loss for insured property.
It occurs when the subject-matter is destroyed or damaged until it is no longer that kind of thing.
It also applies when the owner is permanently and hopelessly deprived of the property.
No formal notice of giving up the property is required to make a claim for this type of loss.

Practical examples

1Captain Mehta's ship, the "Sagar Queen," sinks in the deep ocean after hitting an iceberg on January 5, 2024. Because he is irretrievably deprived of the ship, Section 57 classifies this as an actual total loss.

2A shipment of 500 crates of fresh oranges owned by Mr. Gupta is submerged in salt water for weeks. By the time they are recovered, they have rotted into a fermented mush. Under Section 57, these are no longer "oranges," so they are an actual total loss.

FAQ

1. What is the definition of actual total loss in the Marine Insurance Act, 1963?

According to Section 57 of the Marine Insurance Act, 1963, an actual total loss happens when the insured item is destroyed, loses its identity as that type of thing, or the owner is permanently deprived of it.

2. Do I need to send a notice of abandonment for an actual total loss under Section 57?

No, Section 57 of the Marine Insurance Act, 1963 specifically states that no notice of abandonment needs to be given in the case of an actual total loss.

3. If my ship is stolen and cannot be recovered, is that covered by Section 57?

Yes, being irretrievably deprived of the subject-matter is one of the conditions for an actual total loss under Section 57 of the Marine Insurance Act, 1963.

4. What happens if goods arrive but are completely changed by damage under Section 57?

If the goods cease to be a thing of the kind insured, such as salt turning into liquid, it is considered an actual total loss under Section 57 of the Marine Insurance Act, 1963.

Test yourself

Q1.Under Section 57 of the Marine Insurance Act, 1963, which of these is NOT a condition for an actual total loss?

Q2.Does an assured person have to give a notice of abandonment for an actual total loss under Section 57 of the Marine Insurance Act, 1963?

Q3.Under Section 57 of the Marine Insurance Act, 1963, if a shipment of "white sugar" arrives as a black liquid due to chemical damage, it is:

Q4.If a ship is missing for a long period under Section 58, what type of loss from Section 57 of the Marine Insurance Act, 1963 is presumed?

56PreviousSection 56 Partial and total loss.58NextSection 58 Missing ship.

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