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Insurance Glossary

Total Loss

Claims

Definition

When the cost to repair damaged property exceeds a specified percentage of its value (typically 70-80%), or when property is completely destroyed. In auto insurance, this is often called a 'totaled' vehicle.

Definición en Español

ES

Pérdida Total

Cuando el costo de reparar la propiedad dañada excede un porcentaje especificado de su valor (típicamente 70-80%), o cuando la propiedad está completamente destruida. En seguro de auto, esto se llama a menudo un vehículo 'totalizado'.

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Related Terms

Actual Cash Value
The repayment value for indemnification due to loss or damage of property; in most cases it is replacement cost minus depreciation.
Salvage
Property that remains after an insurance claim has been paid, which the insurance company may take ownership of to offset the claim payment. Common in total loss situations where damaged property still has residual value.
Partial Loss
Damage to property where the cost of repairs is less than the total value of the property. The property can be repaired or restored to its pre-loss condition without being declared a total loss.
Adjuster
A person who investigates claims and recommends settlement options based on estimates of damage and insurance policies held.
Claim
A formal request by a policyholder to an insurance company for coverage or compensation for a covered loss or policy event.
Loss
The basis of a claim for damages under the terms of an insurance policy.
Loss Ratio
The ratio of losses paid plus loss reserves to premiums earned, used by insurers to measure underwriting profitability and pricing adequacy.
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