In insurance claims, total loss or write-off is a situation in which the lost value, repair cost or rescue cost of the damaged property exceeds the value of the insurance.
Such losses may be "total actual losses" or "total constructive losses". Constructive total losses assume further incidental costs beyond repair, such as force majeure .
Video Total loss
General principles
In total losses, the insurer shall indemnify the full guaranteed loss, and the possession of the insured shall thus pass to the insurer under "subrogation" legal proceedings. Although the policy determines the extent of the loss to total partial, the guaranteed party (and NOT the insurance company) has a final decision on whether to make a partial or total claim.
If the insured item is, say, a car or a house, the policy will usually give it a "market value" that may be less than that ensured in the mind; any disputes need to be challenged, perhaps using arbitration. In marine insurance, policies can be assessed (where the value of a vessel or cargo is approved) or not assessed (where market value at the time of claim needs to be ensured). In the absence of fraud, the 1906 Marine Insurance Act states the agreed value in the awarded policy is conclusive, except in cases of constructive total loss, as in The Costa Concordia and The Bamburi me.
Deleted properties are usually dismantled or torn down, discarded, or recycled for sections after their policies are completed; so the insurance company can feel relieved for not having the insured goods as their own, as in Asfar v Blundell [1896].
Policies that include homes, vehicles and other non-investment-affected assets may compensate the insured's losses to be much less than the full replacement cost, so that the insured item may be a "total loss" even if there is some residual value.
Maps Total loss
Auto insurance
About one in seven car crash claims generate "total". Except in extreme circumstances, vehicles that have been removed will not be completely worthless. This is because such vehicles will usually still contain used parts that can be saved, or at least may still have value as scrap metal. All that is needed for the vehicle to be wiped out is the cost is more expensive to be returned to a valuable condition than the market value it will earn. So a vehicle with a low value can even be wiped out when it is fully feasible road, for example due to damage to painting or coatings.
In many jurisdictions, a vehicle that is designated as a total loss is sold by an insurance company to the general public, car dealers, car brokers, or car destroyers. Metrics insurance companies are used to make decisions including the necessary repair costs plus the remaining part value, added to the cost of replacing the driver for the rental while the car concerned is repaired. If this figure exceeds the value of the car after repair, the vehicle is considered total loss. In most jurisdictions, the decision by the insurance company to eliminate the vehicle produces vehicle branding, marks the car as "rescue" or (if fixed and inspected by the next ownership) "rebuilt". If the vehicle is not badly damaged, however, it can be restored to its original condition. After government-approved inspections, vehicles can be re-installed on the road. The checking process may not attempt to assess the quality of the repair. This function will be downgraded to a professional mechanic or inspector. However, if the vehicle is severely damaged according to the standards set by the state or provincial government, the vehicle is dismantled by a car destroyer and sold as part or disposed of.
Once the vehicle has been removed and repaired the vehicle may still lose its value. The reduced value is a reduction in the market value of vehicles that occur after the vehicle is damaged and repaired, otherwise called accelerated depreciation. To accumulate reduced value after a car accident, insurance companies usually request a report of diminished value.
In Canada, this is more commonly called acceleration of depreciation ; how one performs reclamation of losses in one country is a different process. In some US states, insurance companies recognize reduced value and provide this coverage directly to their customers. In Canada, to recover the lost value after an accident, one needs to retain a legal counsel and order an accelerated depreciation report on their car for court use.
Shipping
In marine insurance, conventional marine insurance companies such as Lloyds will issue a policy that includes hull & amp; machinery, or cargo, while P & amp; I clubs bear third party risk (such as cargo carrier damage), pollution risk, and risk of war. The term "total loss" may refer to any of these risks, but generally involves the loss of the stomach or cargo. Total loss may be actual or constructive total loss.
An actual total actual loss of a ship occurs when physical or legal repairs are not possible. Total loss can be expected when a ship disappears and no news is received within a reasonable time. Some legal authorities do not consider it a true total loss if the cost of repairs is only an obstacle, while others include cases where the cost of repairs will exceed ship costs. However, the term "legally impossible" includes examples where the reconstruction will be so extensive that the resulting craft will be considered a new ship legally.
The loss of constructive total is a situation where the cost of repair plus rescue costs is equal to or exceeds the value of the vessel. It also covers cases where the ship has been abandoned with reasonable belief that total loss is unavoidable. Calculations can be affected by environmental cleaning costs.
If the policy is a "valued" policy (so the ship or cargo has "agreed value" rather than "market value"), then, in the absence of fraud, the agreed value is conclusive, but only for total loss. In a constructive total loss, the agreed value is NOT conclusive.
Flights
In flight, the term "gastric loss" is used in aviation accidents that damage aircraft beyond economical repairs, resulting in total losses. The term also applies to situations when the aircraft is lost, the search for its debris is terminated, or when the wreck is completely inaccessible.
See also
- Lemon (car)
- Vehicle branding
- Vehicle insurance
References
External links
- "Autos Weather Katrina, End Up for Sale", Steve Inskeep, Morning Edition , December 29, 2005
- "Katrina's disaster is now Bolivia's headache", Market , Monday, August 27, 2007
- MSNBC.com "Katrina Car
Source of the article : Wikipedia
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