Legal Definitions - total loss

Total loss refers to an undesirable outcome of a risk where there is a disappearance or reduction in value, usually in an unexpected or unpredictable way. It can also refer to the failure to maintain possession of something.

• If a car is completely destroyed in an accident, it is considered a total loss.
• If a property is sold for less than its adjusted value, the difference is considered a loss.
• If an insured property is damaged, the financial detriment caused by the damage for which the insurer becomes liable is considered a loss.

These examples illustrate how total loss can occur in different situations, such as in accidents, sales, and insurance claims. In each case, there is a significant reduction in value or loss of possession that results in a total loss.