Actual Total Loss


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Actual Total Loss

The total amount that an insurance company pays to a policyholder when an insured item is completely destroyed, damaged beyond use, or disappears without explanation. It is also called total loss.
References in periodicals archive ?
was not an actual total loss. It was not an irretrievable deprivation of property.
The second categorization, the "constructive total loss," is defined by Buglass as occurring when "the ship or goods insured are damaged to more than half the value, by any peril insured against." (12) In such a case, the assured may "abandon and recover for a total loss." (13) The Marine Insurance Act defines it as occurring when "the subject-matter insured is reasonably abandoned on account of its actual 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."14 Certain policies thus determine a "constructive total loss" as that which would require repair expenses beyond an "agreed amount." (15)
That is, the valued policy law was neither intended nor written to apply where a first-party property carrier excludes certain causes or perils from coverage and only when those excluded perils or causes are combined with the covered peril or cause is there a constructive total loss or actual total loss.