Total loss

In insurance claims, a total loss or write-off is a situation where the lost value, repair cost or salvage cost of a damaged property exceeds its insured value, and simply replacing the old property with a new equivalent is more cost-effective.

If the insured item is, say, a car or a house, the policy will normally give it a "market value" which may be less than the assured had in mind; any disagreement would need to be challenged, perhaps using arbitration.

In the absence of fraud, the Marine Insurance Act 1906 states the agreed value in a valued policy is conclusive, except in cases of constructive total loss, as in the cases of the cruise ship Costa Concordia and the ship The Bamburi.

[7][8] An actual total loss of a vessel occurs when repair is physically or legally impossible.

So a vehicle of low value may even be written off when fully roadworthy, for example due to damage to paintwork or upholstery, such as from an interior fire, a "hail salvage", or bullet-riddled or "biohazard car" with toxic chemical spills or decomposing bodies found inside.

[citation needed] If this figure exceeds the value of the car after it is repaired, the vehicle is deemed a total loss.

Auto insurers generally settle total loss claims on one of three methods of claim settlement:[15] In most jurisdictions, a decision by an insurer to write off a vehicle results in vehicle title branding, marking the car as "salvage" or (if repaired and reinspected under subsequent ownership) "rebuilt".

In Canada, this is more commonly called accelerated depreciation; how a person goes about reclaiming those losses in either country is a different process.

In some US states, insurance companies acknowledge diminished value and provide this coverage direct to their consumers.

This building will be a "total loss" if its insurer determines that the cost of repairing it exceeds that of its insured value.
Even though only partially sunk in shallow water, in 2012 the relatively new cruise liner Costa Concordia was declared a "constructive total loss" due to escalating environmental and salvage clean-up costs.
A severely damaged automobile with repair costs greatly exceeding its value
Richard Byrd 's Fokker "America" was completely written off after its forced ditching in the Atlantic in June 1927. Byrd and three others survived. The original destination Paris was socked in by fog making a landing impossible at LeBourget. Souvenir hunters stripped the aircraft of its fabric skin and other components.