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 actual, total, loss and/or constructive:
“Every actual State is corrupt. Good men must not obey the laws too well.”
—Ralph Waldo Emerson (1803–1882)
“I have often thought that if photography were difficult in the true sense of the term—meaning that the creation of a simple photograph would entail as much time and effort as the production of a good watercolor or etching—there would be a vast improvement in total output. The sheer ease with which we can produce a superficial image often leads to creative disaster.”
—Ansel Adams (1902–1984)
“Begin with loss and see
how the world contradicts you,
how the horizon implies that beyond it
the water is not empty
but full of ships
all docking at another island.”
—Lynn Emanuel (b. 1949)
“Once we begin to appreciate that the apparent destructiveness of the toddler in taking apart a flower or knocking down sand castles is in fact a constructive effort to understand unity, we are able to revise our view of the situation, moving from reprimand and prohibition to the intelligent channeling of his efforts and the fostering of discovery.”
—Polly Berrien Berends (20th century)