DEFINITION of 'Actual Total Loss'

A loss that occurs when the insured property is totally destroyed or is damaged in such a way that it can be neither recovered nor repaired for further use, or the insured is irretrievably deprived of it. Usually, this indicates the maximum settlement possible according to the terms of the policy.

Also known as "total loss."

BREAKING DOWN 'Actual Total Loss'

When an actual total loss occurs, the insured is not required to give the insurer notice of abandonment (i.e., the surrender of all rights, title and interest) in the insured property in return for the sum insured.

RELATED TERMS
  1. Total Insurable Value

    Total insurable value is the value of property, inventory, equipment, ...
  2. Abandonment Clause

    A clause in a property insurance contract that, under certain ...
  3. Ultimate Net Loss

    A party's total financial obligation when an insured event occurs. ...
  4. Insurable Interest

    An economic stake in an event for which an insurance policy is ...
  5. Personal Lines Insurance

    Property and casualty insurance products for individuals that ...
  6. Insurance

    A contract (policy) in which an individual or entity receives ...
Related Articles
  1. Insurance

    The History Of Insurance In America

    Insurance was a latecomer to the American landscape, largely due to the country's unknown risks.
  2. Insurance

    How To Invest In Insurance Companies

    Knowing the special circumstances that insurance companies operate under helps in evaluating whether or not a listed insurance company is a good investment and whether the economic environment ...
  3. Insurance

    The Importance Of Property Insurance

    Property insurance is important, but there's a lot you need to learn in order to get the proper coverage.
  4. Insurance

    Homeowner's Insurance Guide: A Beginner's Overview

    Everything new homeowners need to know about insurance to protect their residence.
  5. Insurance

    Add-On Insurance: Do You Need It?

    Insurance is important in certain situations, but there isn't always a need.
  6. Financial Advisor

    Getting Life Insurance in Your 20s Pays Off

    Find out how Americans in their 20s can benefit from a well-thought-out life insurance policy, especially if they are able to build cash value for retirement.
  7. Insurance

    The Dangers Of Stranger-Owned Life Insurance

    Find out how these policies can be used to abuse the system that many people rely on for protection.
  8. Investing

    Elements of Insurable Risks: A Quick Guide

    Explore the elements of insurable risk: due to chance, measurable and definite, predictability, noncatastrophic, random selection and large loss exposure.
RELATED FAQS
  1. What is the average return on total revenue for the insurance sector?

    Learn about the three main segments of the insurance industry, and find out what the average return on revenues is for the ... Read Answer >>
  2. What are some examples of industries that practice price discrimination?

    Understand the various types of insurance coverage offered in the insurance marketplace, and learn why each policy should ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  6. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
Trading Center