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.