Actual Total Loss

What Does Actual Total Loss Mean?

An actual total loss refers to the complete destruction of insured property to the extent that it is utterly ruined, irreparably damaged, cannot be recovered, or is inaccessible to the owner. This type of loss typically results in a claim for the maximum coverage.

Insuranceopedia Explains Actual Total Loss

In contrast to a partial loss, an actual total loss results in the owner essentially losing the property, as it is unrecoverable or unusable. For example, if a car being transported on a cargo ship sinks to the bottom of the ocean, that would be considered a total loss. When filing a claim for this type of loss, the policyholder must surrender all rights to the insured property in order to receive compensation for its maximum value.