A total loss occurs when insured property is destroyed, lost, or damaged to the extent recognised as total under the insurance policy. A constructive total loss may arise when recovery or repair is uneconomic under the applicable test. The threshold and valuation basis differ between motor, property, and marine contracts.
For a Nepalese vehicle claim, severe damage does not automatically entitle the owner to the cost of a new vehicle. Payment depends on the insured value, deductions, salvage treatment, and policy terms. Ask for the insurer's calculation and the contractual basis for classifying the claim as a total loss.