total loss

A total loss, in an insurance context, is a claim determination that property, typically a vehicle, is so badly damaged, destroyed, stolen, or otherwise unrecoverable that it is not economically practical to repair or replace under the policy. An insurer may declare a total loss when the estimated repair cost, sometimes considering salvage value or other claim-related costs, meets or exceeds the property's actual cash value or a policy or state-law threshold. When a covered item is determined to be a total loss, the insurer generally settles the claim based on the applicable valuation provision, such as actual cash value, agreed value, stated value, or replacement cost. Such settlement is subject to deductibles, limits, exclusions, and any salvage rights.