CHAPTER 1. The Marine Contract [1880. - 2010.]

Chapter 1 enacted by Stats. 1935, Ch. 145.

§§ 1880–2010 · 66 sections

1. ARTICLE 1. Insurable Interests Peculiar to Marine Insurance §§ 1880–1886 · 7 sections

   • § 1880 The owner of a ship has in all cases an insurable interest in it, even when it has been chartered by one who agrees to pay him its value in case of loss.
   • § 1881 The insurable interest of the owner of a ship hypothecated by bottomry is only the excess of its value over the amount secured by bottomry.
   • § 1882 Freightage, in marine insurance, signifies all the benefit derived by the owner, either from the chartering of the ship or its employment for the carriage of…
   • § 1883 The owner of a ship has an insurable interest in expected freightage which he would have certainly earned but for the intervention of a peril insured against.
   • § 1884 The interest mentioned in the last section exists, in the case of a charter party, when the ship has broken ground on the chartered voyage. If a price is to be…
   • § 1885 In marine insurance, a person who has an interest in the thing from which profits are expected to proceed, has an insurable interest in the profits.
   • § 1886 The charterer of a ship has an insurable interest in it, to the extent that he is liable to be damaged by its loss.
2. ARTICLE 2. Concealment and Representations—Rules Peculiar to Marine Insurance §§ 1900–1905 · 6 sections

   • § 1900 In marine insurance each party is bound to communicate, in addition to what is required in the case of other insurance: (a) All the information which he…
   • § 1901 In marine insurance, information of the belief or expectation of a third person in reference to a material fact, is material.
   • § 1902 A person insured by a contract of marine insurance is presumed to have, at the time of insuring, knowledge of a prior loss, if the information might possibly…
   • § 1903 In marine insurance, concealment in respect to any of the following matters does not vitiate the entire contract, but merely exonerates the insurer from a loss…
   • § 1904 In marine insurance, if a representation by the insured is intentionally false in any respect, whether material or immaterial, the insurer may rescind the…
   • § 1905 The failure of subsequent circumstances to conform to a representation as to expectation does not, in the absence of fraud, avoid marine insurance.
3. ARTICLE 3. Implied Warranties Peculiar to Marine Insurance §§ 1920–1927 · 8 sections

   • § 1920 In every marine insurance upon a ship or involving transportation by ship, a warranty is implied that the ship is seaworthy.
   • § 1921 A ship is seaworthy when reasonably fit to perform the services and encounter the ordinary perils of the voyage contemplated by the parties to the policy.
   • § 1922 An implied warranty of seaworthiness is complied with if the ship is seaworthy at the time of the commencement of the risk, except in the following cases: (a)…
   • § 1923 A warranty of seaworthiness extends not only to the condition of the structure of the ship itself, but also requires that it be properly laden and provided…
   • § 1924 Where any portion of the voyage contemplated by a policy differs from other portions in respect to the things requisite to make the ship seaworthy therefor, a…
   • § 1925 When a ship becomes unseaworthy during the voyage, an unreasonable delay in repairing the defect exonerates the insurer from liability on any loss arising from…
   • § 1926 A ship may be seaworthy for the purpose of insurance upon itself and, at the same time, unseaworthy for the purpose of insurance upon the cargo because of…
   • § 1927 Where the nationality or neutrality of a ship or cargo is expressly warranted, it is implied that: (a) The ship will carry the requisite documents to show such…
4. ARTICLE 4. Effect of Course of Voyage §§ 1940–1945 · 6 sections

   • § 1940 When the voyage contemplated by marine insurance is described by the places of beginning and ending, the voyage insured is one which conforms to the course of…
   • § 1941 If the course of sailing is not fixed by mercantile usage, the voyage insured by marine insurance is that way between the places specified which, to a master…
   • § 1942 Deviation is: (a) A departure from the course of the voyage insured. (b) An unreasonable delay in pursuing the voyage. (c) The commencement of an entirely…
   • § 1943 A deviation is proper: (a) When caused by circumstances over which neither the master nor the owner of the ship has any control. (b) When necessary to comply…
   • § 1944 Every deviation not specified in the last section is improper.
   • § 1945 An insurer is not liable for any loss happening to the subject matter of marine insurance after an improper deviation.
5. ARTICLE 5. Loss in Marine Insurance §§ 1960–1997 · 38 sections

   • § 1960 A loss is either total or partial.
   • § 1961 A total loss is either actual or constructive.
   • § 1962 An actual total loss is caused by: (a) A total destruction of the subject matter of insurance. (b) The loss of the subject matter by sinking, or by being…
   • § 1963 A constructive total loss is one which gives to a person insured a right to abandon, under section 1971.
   • § 1964 An actual loss may be presumed from the continued absence of a ship without being heard of. The length of time which is sufficient to raise this presumption…
   • § 1965 When a ship is prevented, at an intermediate port and by the perils insured against, from completing the voyage, the master shall make every exertion to…
   • § 1966 In addition to the liability mentioned in section 1965, a marine insurer is liable, up to the amount insured, for damages, expenses of discharging, storage,…
   • § 1967 Upon an actual total loss, the insured is entitled to payment without notice of abandonment.
   • § 1968 Where it has been agreed that an insurance upon a particular subject matter, or class of subject matter, is to be free from particular average, a marine…
   • § 1969 When insurance is confined in its terms to an actual total loss, it does not cover a constructive total loss, but it does cover any loss which necessarily…
   • § 1970 Abandonment, in marine insurance, is the act of the insured by which, after a constructive total loss, he declares the relinquishment to the insurer of the…
   • § 1971 In marine insurance, after abandonment of the subject matter of insurance or of any particular portion thereof which is separately valued by the policy or…
   • § 1972 An abandonment can not be either partial or conditional.
   • § 1973 An abandonment can be made only at a time limited by all of the following: (a) Within a reasonable time after the information of the loss. (b) After the…
   • § 1974 Where the information upon which an abandonment has been made proves incorrect, or the subject matter of insurance is so far restored when the abandonment is…
   • § 1975 Abandonment is made by giving oral or written notice thereof to the insurer.
   • § 1976 A notice of abandonment shall be explicit, and shall specify the particular cause of the abandonment, but need state only enough to show that there is probable…
   • § 1977 An abandonment can be sustained only upon the cause specified in the notice thereof.
   • § 1978 An abandonment is equivalent to a transfer to the insurer of the insured’s interest, with all the chances of recovery and indemnity.
   • § 1979 Whenever a marine insurer pays for a loss as if it were an actual total loss, he is entitled to whatever remains of the subject matter insured, or its proceeds…
   • § 1980 Upon an abandonment, acts done subsequent to the loss and in good faith by persons who at the time were the insured’s agents in respect to the subject matter…
   • § 1981 An acceptance of an abandonment is not necessary to the rights of the insured, and is not to be presumed from the mere silence of the insurer at the time of…
   • § 1982 The acceptance of an abandonment, whether express or implied, is conclusive upon the parties and admits the loss and the sufficiency of the abandonment.
   • § 1983 An abandonment once made and accepted is irrevocable, unless the ground upon which it was made proves to be unfounded.
   • § 1984 On an accepted abandonment of a ship, freightage earned previous to the loss belongs to the insurer of the freightage; but freightage subsequently earned…
   • § 1985 If an insurer refuses to accept a valid abandonment, he is liable as upon an actual total loss, after deducting from the amount of the loss any proceeds of the…
   • § 1986 If an insured omits to abandon, he may nevertheless recover his actual loss.
   • § 1987 (a) A valuation fraudulent in fact entitles a marine insurer to rescind the contract. (b) When the subject matter has been hypothecated by bottomry or…
   • § 1988 In a case of partial loss, a marine insurer is liable only for such proportion of the amount insured by him as the loss bears to the value of the whole…
   • § 1989 Where profits are separately insured in marine insurance, in case of loss the insured is entitled to recover that proportion of such profits which the value of…
   • § 1990 In case of a valued policy of marine insurance on freightage or cargo, if only a part of the subject matter is exposed to risk, the valuation applies only in…
   • § 1991 When profits are valued and insured by marine insurance, a loss of them is conclusively presumed from a loss of the property out of which they were expected to…
   • § 1992 In estimating a loss under an open policy of marine insurance, the following rules are to be observed: (a) The value of a ship is its value at the beginning of…
   • § 1993 If cargo insured against partial loss arrives at the port of destination in a damaged condition, the loss of the insured is computed as follows: (a) Deduct the…
   • § 1994 A marine insurer is liable for all the expense attendant upon a loss which forces the ship into port to be repaired. Where it is agreed that the insured may…
   • § 1995 In marine insurance, when an insured is required to make a contribution in respect to the subject matter of insurance toward a general average loss, if the…
   • § 1996 In marine insurance, where an insured has a demand against others for contribution, he may claim the whole loss from the insurer, subrogating the insurer to…
   • § 1997 In the case of a partial loss of a ship or its equipments, the old materials are to be applied towards payment for the new. Whether the ship is new or old, a…
6. ARTICLE 6. Exemptions § 2010 · 1 section

   • § 2010 The provisions of Sections 481, 800, 801, 802, 803, and 804 shall not apply to ocean marine insurance as defined in Section 481.