Constructive Total Loss
A constructive total loss is an insurance term where the cost of a repair for an item (e.g., house, boat or car) is more than the current value of that item. It can also refer to an insurance claim that is settled for the entire amount of a property on the basis that the cost to repair or recover the damaged property exceeds its replacement cost or market value.
Constructive total loss for a vehicle means that the damage is so extensive that repairs would equal or surpass the cost of the vehicle or its insurance limit. This type of loss is common in a head-on collision or total wreck.
For a home, it is common when a home is destroyed by a serious fire or other severe calamity. In cases where the property is damaged to the point where it is considered a constructive total loss, the insured could potentially allow the insurer to assume all rights over the material good.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
constructive total loss — ➔ loss * * * constructive total loss UK US noun [C or U] (ABBREVIATION CTL) ► INSURANCE a situation in which insured property, especially a ship, is not completely destroyed, but so badly damaged that the cost of repairing it is greater than the… … Financial and business terms
constructive total loss — see loss Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 … Law dictionary
constructive total loss — A loss in which the item insured is not totally destroyed but is so severely damaged that it is not financially worth repairing. The Marine Insurance Act (1906) defines a constructive total loss as one in which «the subject matter insured is… … Big dictionary of business and management
constructive total loss — In insurance, exists whenever insured item of property has lost its total usefulness and insured is deprived of its benefit totally. See also constructive loss actual total loss … Black's law dictionary
constructive total loss — A loss of such a character as to authorize the insured to abandon the property and recover as for a total loss, although there is not an absolute extinction of the subject of the insurance. 29A Am J Rev ed Ins § 1571 … Ballentine's law dictionary
constructive total loss — noun : a loss to insured property that is not total but is so great that repair would cost more than the value of the property … Useful english dictionary
total loss — Fire insurance. The complete destruction of the insured property by fire, so that nothing of value remains from it; as distinguished from a partial loss, where the property is damaged, but not entirely destroyed. Test whether building burned is… … Black's law dictionary
total loss — The complete destruction of the property covered by an insurance policy. The complete destruction of a building as a building, although not necessarily the extinction of all its parts as materials or such destruction that no part is left standing … Ballentine's law dictionary
actual total loss — ➔ loss * * * actual total loss UK US noun [C or U] (ABBREVIATION ATL) INSURANCE ► a situation in which insured property is totally destroyed, lost, or made useless, and the insurance company pays the maximum amount: »They claimed that the capture … Financial and business terms
actual total loss — The complete destruction or loss of an insured item or one that has suffered an amount of damage that makes it cease to be the thing it originally was. For example, a motor car would be an actual total loss if it was destroyed, stolen and not… … Big dictionary of business and management