Under what condition can the insured recover a total loss of the vessel?

To recover a total loss of the vessel, the correct condition is when the value is reduced by more than three fourths. This is known as a constructive total loss, where the damage to the vessel is so extensive that the cost of repairs or recovery exceeds a certain percentage of its value. In this case, if the vessel's value drops by more than seventy-five percent, the insured is considered to have suffered a total loss even if the vessel itself is still in existence and has not been completely destroyed.

This principle allows the insured to recover insurance proceeds as if the vessel were a total loss, thus providing financial relief in situations where the damage makes it impractical to repair the vessel or where the repairs would not justify the investment compared to its reduced value.

While other scenarios such as the vessel sinking, the insurer agreeing to accept abandonment, or the vessel being lost at sea may also lead to claims for loss, they do not universally guarantee recovery for a total loss under all insurance policies. Each of those situations depends on specific terms and conditions in the policy and may not meet the criteria for total loss recovery. In contrast, a reduction in value by more than three fourths establishes a clear basis for claiming a total loss.