Total loss
Boat insurance term, area: Settlement
A total loss means the boat is beyond saving, or that repairing it would cost more than the vessel is worth. Wordings normally split this in two: destruction, where the wreck still exists and can be surveyed, and a total loss with no prospect of recovery, after a sinking in deep water or a theft. Then comes the question that decides the payment: does the contract settle at the sum insured written into it, or at the market value on the day of the loss? On a boat twelve years old the gap between those two figures can run into tens of thousands. Salvage proceeds are usually deducted.
What to check: Two questions for the contract at hand: at a total loss, is the payment the agreed sum insured or the depreciated market value, and is an age limit or a proof of replacement attached to it? And is the deductible still taken off when the boat is a total loss?
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A general explanation in our own words.
What applies to you is set only by the wording of your own policy.
