Legal Definitions - actual total loss

Definition: Actual total loss refers to the complete destruction or loss of value of an insured property, for which the insurer becomes liable. It can also refer to the failure to maintain possession of a thing.

Examples:

• If a ship sinks or is irreparably damaged beyond recovery, it is considered an actual total loss in marine insurance.
• If a car is completely destroyed in an accident, it is an actual total loss for the owner.
• If a person loses their house due to a natural disaster, it is an actual total loss for them.

These examples illustrate how actual total loss occurs when the insured property is completely destroyed or lost, and the insurer becomes liable for the financial detriment caused by the loss.