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Constructive total loss
 

 

A term used in insurance, particularly marine insurance, where a ship is not completely lost but has been abandoned because the cost of saving it would exceed its value when saved. The insured may treat it as a total loss, or partial loss. In the latter instance he claims for damage done, in the former instance he gives notice of abandonment and the insurer takes over all rights.

Reference: The Penguin Business Dictionary, 3rd edt.