Total Loss Formula

The Total Loss Formula is a financial concept used mainly in insurance and risk assessment. It helps determine the complete loss of value in an asset, such as property or a car, when it's damaged or destroyed. In simple terms, it calculates how much the owner loses in value, factoring in the replacement cost, depreciation, and any salvage value. This formula ensures that compensation reflects the true financial impact of the loss, providing a fair assessment for insurance claims or financial evaluations.