What is CTL Full Form in Insurance?
The CTL full form in Insurance is a constructive total loss. It is a loss in which the insured object is not destroyed but is so severely damaged that the insurance company deems it uneconomical to repair. The covered item will be totaled, and the title will be returned to the insurance company.
Significance of Constructive total loss in insurance:
A constructive total loss for a vehicle indicates that the damage is so extreme that repairs would equal or exceed the vehicle’s cost or insurance limit. When a home is destroyed by fire or other natural disaster, it is normal to suffer a constructive total loss. In such instances, the insured party may enable the insurer to assume complete control of the insured property as part of the claim settlement. Following the settlement of the policies, the properties are typically demolished, scrapped, or recycled for parts.
How can we differentiate total loss and constructive total loss:
If the car has been severely damaged and cannot be restored to its pre-loss condition, it is considered a total loss. However, if the vehicle is damaged but repairable, yet the repair cost exceeds the car’s IDV by 75%, it is considered a constructive total loss.