§ 1961 Total Loss Types

• •A total loss can be real (the thing is gone) or constructive (repair costs exceed value).
• •Actual loss means the item is completely destroyed.
• •Constructive loss means keeping the item would cost more than its worth.

Your car is in a crash and is completely wrecked, or the damage is so expensive that fixing it would cost more than the car is worth.

In the first case the car is an actual total loss because it's destroyed. In the second case it's a constructive total loss because it would be cheaper to write it off than to repair it.