Direct Loss
Definition of "Direct loss"
Property loss in which the insured peril is the proximate cause (an unbroken chain of events) of the damage or destruction. Most basic property insurance policies (such as the standard fire policy) insure against only direct loss and not indirect loss or consequential loss. For example, a fire within the wall structure of a house causes the drapes to catch fire, which in turn fans flames onto the furniture a direct loss. An indirect loss would be inconvenience of the inhabitants, who would not be able to sleep in their home, thus causing a drop in their efficiency at work.
Popular Insurance Terms
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