Actual Total Loss and Constructive Total Loss
These two terms are used to differentiate the degree of proof where a vessel or cargo has been lost. An actual total loss occurs where the damages or cost of repair clearly equal or exceed the value of the property. A constructive total loss is a situation where the cost of repairs plus the cost of salvage equal or exceed the value.
The use of these terms is contingent on there being property remaining to assess damages, which is not always possible in losses to ships at sea or in total theft situations. In this respect, marine insurance differs from non-marine insurance, where the insured is required to prove his loss. Traditionally, in law, marine insurance was seen as an insurance of "the adventure", with insurers having a stake and an interest in the vessel and/or the cargo rather than simply an interest in the financial consequences of the subject-matter's survival.
Read more about this topic: Marine Insurance
Famous quotes containing the words total loss, actual, total, loss and/or constructive:
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—John Berger (b. 1926)
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—Henry David Thoreau (1817–1862)
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—Sarah Fielding (1710–1768)
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—Sarah Patton Boyle, U.S. civil rights activist and author. The Desegregated Heart, part 1, ch. 15 (1962)