Duhaime's Law Dictionary


Actual Total Loss Definition:

Property that is completely destroyed, or lost and irretrievable; a term of insurance and maritime law.

Related Terms: Constructive Total Loss

Also known as total loss.

The British Marine Insurance Act, at §57(1):

"Where the subject-matter insured is destroyed, or so damaged as to cease to be a thing of the kind insured, or where the assured is irretrievably deprived thereof, there is an actual total loss. In the case of an actual total loss no notice of abandonment need be given."

The Canadian Maritime Insurance Act provides, at §56:

"A loss is an actual total loss if 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. Where a ship engaged in a marine adventure is missing and no news of the ship is received within a reasonable period, an actual total loss may be presumed."

In Chorley and Giles' Shipping Law, the authors wrote:

"The most obvious instance of the sum insured becoming due and payable is the actual total loss of the subject matter insured.

"... (T)he mere sinking of a ship need not immediately constitute an actual loss. But this will be the case if what has gone to the bottom of the sea has ceased to be a ship.

"Goods are regarded as an actual total loss as soon as they cease to be goods of the kind insured from a commercial point of view."

Differs from a constructive total loss in that where a vessel or some other insured item that has been characterized as an actual total loss, it is, in fact, lost or completely destroyed.

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