What Does Total Loss Mean?

[CarsonLynn]

Total loss refers to a situation where total loss is inevitable, or when the residual value of the damaged vehicle plus the costs of rescue, sorting, repair, and continued transportation to the destination exceed a certain value, it is considered a total loss. Actual total loss of vehicle: Actual total loss of a vehicle, also known as absolute total loss, refers to the loss where the damaged vehicle is completely destroyed in physical form or economic value. For example, after a severe collision that causes significant damage to the engine and the passenger compartment, the vehicle can be defined as an actual total loss. Constructive total loss: Constructive total loss refers to a situation where the insured vehicle is not completely destroyed after damage and can be repaired or recovered, but the cost involved would exceed the value of the insured vehicle after rescue, making it not worthwhile. In such cases, the insurance company abandons further efforts and compensates the insured with the full insured amount, which is considered a constructive total loss.