The property can be repaired, but the cost to repair the damaged property is greater than the value of the property after it is repaired (it would cost more to repair it than it would be worth when done). It is more economical for the insurance carrier to pay the insured the "value" of the property (its actual cash value or replacement cost, however the policy is set up) and recover as much in salvage value as possible.
Constructive Total Loss
August 14, 2008
by Christopher J. Boggs, CPCU, ARM, ALCM
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