Total loss refers to a situation in which an insured item, such as a vehicle or property, is damaged to such an extent that it is deemed economically unviable or impractical to repair. This means that the cost of fixing the item would exceed its actual cash value or the policy’s coverage limits.

For example, if your car is involved in a severe accident and the cost of repairing the damages exceeds the value of the car, it may be declared a total loss. In this case, the insurance company will provide you with a payment equivalent to the current market value of the car, allowing you to replace it.

Experiencing a total loss can be distressing, but having coverage can provide financial protection in such situations. It ensures that you receive compensation, enabling you to recover and move forward.

It’s important to review your policy to understand how total loss is defined and the coverage provided for such circumstances. This will help you make informed decisions and ensure that you have appropriate protection for your valuable assets.