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:
“When we suffer anguish we return to early childhood because that is the period in which we first learnt to suffer the experience of total loss. It was more than that. It was the period in which we suffered more total losses than in all the rest of our life put together.”
—John Berger (b. 1926)
“My actual life is a fact, in view of which I have no occasion to congratulate myself; but for my faith and aspiration I have respect. It is from these that I speak.”
—Henry David Thoreau (1817–1862)
“By sharing the information and observations with the caregiver, you have a chance to see your child through another pair of eyes. Because she has some distance and objectivity, a caregiver often sees things that a parent’s total involvement with her child doesn’t allow.”
—Amy Laura Dombro (20th century)
“Perhaps it is a universal truth that the loss of liberty at home is to be charged to provisions against danger, real or pretended, from abroad.”
—James Madison (1751–1836)
“Friendship among nations, as among individuals, calls for constructive efforts to muster the forces of humanity in order that an atmosphere of close understanding and cooperation may be cultivated.”
—Franklin D. Roosevelt (1882–1945)