Total Loss Only (TLO) Insurance


Definition of "Total Loss Only (TLO) insurance"

Kathi Flaherty real estate agent
Kathi Flaherty, Real Estate Agent Invictus Real Estate

Life is unpredictable so to compensate this, people have invented insurance. Insurance deals with unforeseen events. Sometimes insurance companies cover only a part of your losses and a few named perils, while sometimes it covers every damage imaginable and every mishap. If you are a driver, you might mistake the definition of total loss only insurance for total loss in a car accident, when the insurance company declares your car “totaled” - not worthy of any repairments.

A Total Loss Only insurance covers your goods only in the event they are completely destroyed and irrecuperable. It’s a low-cost insurance policy if you compare it with All Risk insurance.

Shipping companies rely a lot on Total Loss Only (TLO) insurance because this limits a lot the amount of damage they are responsible for so they don’t lose money unless the merchandise was stolen, completely destroyed by fire or the ship sank.

Total Loss Only insurance is also available for people who have to move their belongings to their new house. By federal law, most moving companies have to offer at least two kinds of insurance for shipments, but TLO is not included. This kind of moving insurance covers the goods only in the event of a catastrophe. Check with your agent to understand better what catastrophe means for your insurance company. This kind of insurance can be purchased any time before you start packing, in comparison to All Risk insurance, which cannot be purchased later than two days before packing.

For those who do not work with a moving company, TLO insurance might be the only alternative left. This type of policy will cover your goods only if you lose everything or your goods are damaged beyond repair.

For marine cargo, Total Loss Only insurance is the only insurance available for self-packed parcels or boxes. It doesn’t provide coverage for partial loss or damage.

In case of damage or loss, make sure you file a claim as soon as possible. Do not postpone that or you may find your claim was not timely enough to qualify for any reimbursement or compensation.

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