Constructive total loss

When the insured property has been damaged to such an extent that it is uneconomic to salvage it, a constructive total loss may be declared. A constructive total loss is not the same as an actual total loss, whereby the insured property is totally destroyed. In crop insurance, a constructive total loss may be declared when damage levels exceed a pre- determined percentage of the crop making it uneconomical to harvest the remaining crop, i.e. harvest costs are greater than the value of the undamaged crop.

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