Total Loss

9 months ago

Insurance Glossary Team

1 minute

Plain English Definition: A situation where the cost of repair exceeds the insured item’s value.

What Total Loss really means for someone with an insurance policy

When an item is declared a total loss, the insurer compensates the policyholder based on the item’s value before the loss, typically leading to policy settlement.

Total Loss Real World Examples

A car declared a total loss after a severe accident.
A home considered a total loss following a major fire.
A boat declared a total loss after sinking in a storm.