§ 1969 Insurance Coverage For Total Losses

• •Insurance limited to actual total loss does not cover constructive total loss.
• •It does cover loss that makes you lose the entire item at the destination port.
• •The rule applies specifically to the place where the goods are supposed to arrive.

You ship a boat overseas and the insurance only covers actual total loss. If the boat is completely destroyed in a fire, the insurer pays. If the boat is badly damaged but can be repaired for less than its value (a constructive total loss), the insurer does not pay. If the boat is stolen and you never get it at the destination, the insurer must pay.

Because the policy is limited to actual total loss, the insurer only pays when the whole boat is gone at the destination, not when it's just heavily damaged.