Concept

Total loss

Summary
In insurance claims, a total loss or write-off is a situation where the lost value, repair cost or salvage cost of a damaged property exceeds its insured value, and simply replacing the old property with a new equivalent is more cost-effective. Such a loss may be an "actual total loss" or a "constructive total loss". Constructive total loss considers further incidental expenses beyond repair, such as force majeure. General principles In a total loss, the insurer must indemnify the assured in full, and ownership of the insured item thereby passes to the insurer under the legal process of "subrogation". Although the policy determines the level at which the loss becomes total rather than partial, nevertheless the assured (and NOT the insurer) has the final say as to whether he wishes to make a partial or total claim. If the insured item is, say, a car or a house, the policy will normally give it a "market value" which may be less than the assured had in mind; any disagreem
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