total loss

total loss
The complete destruction of the property covered by an insurance policy. The complete destruction of a building as a building, although not necessarily the extinction of all its parts as materials or such destruction that no part is left standing. 29A Am J Rev ed Ins § 1536. In marine insurance, a total and actual loss to the insured of the subject matter of the insurance; a destruction of the thing in specie, even though some of its component elements or parts may remain. 29A Am J Rev ed Ins § 1570. There can be no "total loss" so long as the remnant of the structure standing is reasonably adapted for use as a basis upon which to restore the building to the condition in which it was before the injury; and whether it is so adapted depends upon whether a reasonably prudent owner, uninsured, desiring such a structure as the injured one was before the injury, would, in proceeding to restore the building to its original condition, utilize such remnant as such basis. Royal Insurance Co. v McIntyre, 90 Tex 170, 182, 37 SW 1068. A building is "wholly destroyed" within the meaning of a statute providing that when an insured structure shall be wholly destroyed the amount of the policy shall be conclusive of the true value of the property when insured and of the true amount of the loss, where it has lost its specific character and ceased to exist as a building, although a portion of the foundation remains which might be. used in rebuilding. Grandview Inland Fruit Co. v Hartford F. Ins. Co. 189 Wash 590, 66 P2d 827, 109 ALR 1472. As the term is used in fire insurance, it means the complete destruction of the insured property by fire, so that nothing of value remains of it, as distinguished from a partial loss, where the property is damaged, but not entirely destroyed. This does not mean that the materials of which the building was composed were all utterly destroyed or obliterated, but that the building, though some part of it may be left standing, has lost its character as a building, and, instead thereof, has become a broken mass, or so far in that condition that it cannot properly any longer be designated as a building. When that has occurred, then there is a total destruction or loss. A total loss does not mean an absolute extinction. Corbett v Spring Garden Ins. Co. 155 NY 389, 50 NE 282. See constructive total loss.

Ballentine's law dictionary. . 1998.

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