YOU ASK:

What is the definition of Total Loss?

WE ANSWER:

Total Loss is refers to the condition of a property or automobile where the damage is such that the repairs would cost as much, or more, than the value of the property (based on its pre-accident condition). The insurance company also takes into account salvage value (the money the damaged property would bring if it were sold). It also means that the property cannot be rebuilt or repaired so that it is back to its state immediately before the accident.

Insurance companies would usually pay the insured the maximum limit (face amount covered) in the event of a total loss.

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