The loss incurred when goods damaged by a marine peril are sold at an intermediate port because it is considered they will be worthless by the time of reaching the original destination. The underwriter pays a total loss but takes credit for the net proceeds of the sale.
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Where the goods insured under a Marine policy are damaged and as a result of the damage are sold short of destination for less than their insured value there is said to be a salvage loss. The insurer must pay the difference between the insured value and the proceeds, after deduction of sale charges and survey fee of the sale.