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. For the purpose of determining what is reasonable, regard must be had to the course whieli would be pursued by a prudent uninsured owner under the circumstances of the case. In particular, there is a constructive total 19ss—(i) w here the assured is deprived of the possession of his ship or goods by a peril insured against, and (a) it is uncertain whether 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 tLeir 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 m ill exceed the value of the ship \Olen repaired. In estimating the cost of repairs, the expense of future salvage operations, and any future general average contribution to which the ship would be liable (if repaired) must be taken into account ; or (iii) in the case of damage to goods, where the cost of repairing the damage and formarding the goods to their destination would exceed their value on arrival. Where there is a constructive total loss the assured may either treat the loss as a partial loss, or abandon pre Al3ANDONNIENT] the subject-matter insured to the insurer, and treat the loss as if it were an actual total loss. Where the assured elects to abandon the subject-matter instired to the underwriter, he must give notice of abandonment. A consequence of failure to give such notice is that the loss can be treated only aS a partial loss. This notice,
however, may be waived by the underwriter, and where the latter has re insured he is not entitled.to notice.
Right; of underwriter on payment.—An underwriter upon paying for n.
total loss thereby becomes entitled to w hatever remains of the subject-matter insured; and Ile is thereby " subrogated " to all the rights and remedies of the assured in and in respect of the subject-matter as froni the time of the casualt v causing the loss. Consequently, it' the loss is occasioned by a collision, the linden% liter is entitled to the damages; though, of course, Ile coulcl not obtain these damages if the ship in fault in the collision were also the property of the assured. As a general rule convenience requiros an instant sale, at or near the scene of the loss, of what remains of the subject-matter ; such a sale is made on the account of the underwriter, who receives the pro ceeds. In the case of a total loss the underwriter's right to the subject matter is not limited to the amount he has. paid under the policy ; it is therefore possible, though unlikely, that he may recover more than he has himself paid. Where the underwriter pays for a partial loss, he does not acquire any title to the subject-matter, or such part of it as remains ; but he Is only subrogated to the rights and remedies of the assured in and in respect of the subject-matter as from the time of the casualty causing the loss, in so far as the assured has been indemnified by such payment for the loss. In a case where:the assured is over-insured by double insurance, each underwriter Is bound, as between himself and the other underwriters, to contribute rateably