Actual Total Loss Law and Legal Definition

The term actual total loss a marine insurance term which signifies that property is completely destroyed or irretrievably lost and hence cannot be redeemed. An actual total loss is presumed when the subject-matter insured is destroyed or is so damaged as to cease to be a thing of the kind insured or if the insured is irretrievably deprived of the subject-matter. For instance, where a ship engaged in a marine adventure goes missing and no news of the ship is received within a reasonable period, an actual total loss may be presumed. An actual total loss is different from a constructive total loss. In the latter case, the insured property is abandoned because it could not be repaired without incurring an expenditure which would obviously exceed its actual value.